Consolidated Fund (Appropriation) (No. 2) Bill

Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
	Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)
	On Question, Bill read a second time; Committee negatived.

Communications Bill

Lord McIntosh of Haringey: My Lords, I beg to move that the Bill be now further considered on Report.
	Moved, That the Bill be further considered on Report.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

Lord Addington: moved Amendment No. 31:
	After Clause 12, insert the following new clause—
	"DUTY TO ESTABLISH AND MAINTAIN DISABILITY AND OLDER PEOPLE'S ADVISORY BOARD
	(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c. 11) (committees of OFCOM and advisory committee) to establish and maintain a committee to be known as "the Disability and Older People's Advisory Board".
	(2) The Disability and Older People's Advisory Board shall consist of—
	(a) a chairman appointed by OFCOM; and
	(b) such number of other members appointed by OFCOM as OFCOM think fit.
	(3) The chairman of the Disability and Older People's Advisory Board must be a non-executive member of OFCOM or a member of their Content Board but is not to be the chairman of OFCOM.
	(4) In appointing persons to be members of the Disability and Older People's Advisory Board OFCOM must secure that the Advisory Board are able to give informed advice about matters referable to—
	(a) the interests of persons with disabilities;
	(b) the interests of persons of pensionable age;
	(c) the development of domestic electronic communications apparatus which is capable of being used with ease and without modification by the widest possible range of individuals including those with disabilities;
	(d) the development of technologies which facilitate access by disabled or older people to electronic communications services;
	(e) telecommunications services for disabled or older people;
	(f) television and other broadcasting services for disabled or older people; and
	(g) employment and training opportunities for disabled or older people in the broadcasting and telecommunications industries.
	(5) The validity of any proceedings of the Disability and Older People's Advisory Board shall not be affected by any failure by OFCOM to comply with subsection (4).
	(6) It shall be the duty of OFCOM when appointing members of the Disability and Older People's Advisory Board in accordance with paragraph 14(3) of the Schedule to the Office of Communications Act 2002 (c. 11) (at least one member of non-advisory committee to be member or employee of OFCOM) to secure, so far as practicable, that a majority of the members of the Board (counting the chairman) consists of persons who are neither members nor employees of OFCOM.
	(7) The following shall be disqualified from being the chairman or another member of the Disability and Older People's Advisory Board—
	(a) governors and employees of the BBC;
	(b) members and employees of the Welsh Authority; and
	(c) members and employees of C4C.
	(8) Before appointing a person to be the chairman or another member of the Disability and Older People's Advisory Board, OFCOM must satisfy themselves that he will not have any financial or other interest which would be likely prejudicially to affect the carrying out by him of any of his functions as chairman or member of the Board.
	(9) A person is not to be taken to have such an interest by reason only that he is or will be a member or employee of OFCOM.
	(10) Every person whom OFCOM propose to appoint to be the chairman or another member of the Disability and Older People's Advisory Board, shall, whenever requested to do so by OFCOM, furnish OFCOM with any information they consider necessary for the performance of their duty under subsection (8).
	(11) In addition to paying remuneration and expenses under paragraph 14(4) of the Schedule to the Office of Communications Act 2002, OFCOM may—
	(a) pay to, or in respect of, any member of the Disability and Older People's Advisory Board who is not a member or employee of OFCOM, such sums by way of pensions, allowances or gratuities as OFCOM may determine; and
	(b) provide for the making of such payments to or in respect of any such member of the Board.
	(12) In subsection (11)—
	(a) the reference to pensions, allowances and gratuities includes a reference to similar benefits payable on death or retirement; and
	(b) the reference to providing for the payment of a pension, allowance or gratuity to, or in respect of, a person includes a reference to the making of payments towards the provision or payment of a pension, allowance or gratuity, or of any such similar benefits, to or in respect of that person."

Lord Addington: My Lords, to move this proposed new clause as a probing amendment is not appropriate on Report, but it does seek to extract from the Government exactly what is their attitude on the issue. What colours the debate is the news that Ofcom has stated that it will set up a committee to give advice on attitudes towards and activities concerning disabled people. That is welcome, but it is a fact that any body that is set up on a voluntary basis can be removed as easily as it has been created; that is, at will. Moreover, what tends to happen with voluntary activities is that they last only as long as the people working on their behalf remain enthusiastic and committed.
	When considering all the issues and legislation surrounding disability, if we could rely on people always behaving in a generous, open-handed and considerate manner, we would not have needed any of our disability legislation in the first place. Similarly, if we could rely on people always to be on top of matters, we would not need any legislation. So, although we must welcome what the new chairman of Ofcom has done, we still need a commitment to ensure that the committee will continue to function and operate in a recognisable form in the future. To be perfectly honest, that explanation probably deals with the arguments lying behind Amendments Nos. 31 and 32.
	I turn now to my Amendment No. 46, which is grouped with Amendment No. 31. This amendment seeks to form a committee to advise the consumer panel. It is a straightforward issue. The panel is to include one or two representatives from certain groups. If one has representation for large issues such as disability matters from only one person, there is a tendency for that single representative to be expert in one form of disability and to know a little about all the surrounding issues. Such people then tend to pick up more information as they go along and find out exactly who to talk to. But that is not a sufficiently wide information base to enable such a representative to advise the consumer panel; it is simply not enough.
	If a committee were set up to advise the representatives serving on the consumer panel, then we would stand a chance of being able to bring forward and present sufficient information to ensure that those representatives were able to hold their own. We want to make sure that they are briefed with enough information to function well on the panel.
	I know about this from personal experience. As a spokesman for disability issues, I am always going into new areas in which I might well know the first two or three steps, but I do not know all the intricate detail. That is simply the way it works. As soon as someone is put in charge of a certain field, they need much more information. I am sure it is the same for any other issue that requires this kind of portfolio of knowledge.
	I hope that the Government will be able to give us an assurance either that they will make provision for more information, or that something has already been put in place. I say that because we have genuine worries about both of these situations. I look forward to hearing a positive response from the Minister. I beg to move.

Baroness Buscombe: My Lords, I support Amendments Nos. 31 and 32, to which I have added my name. As the noble Lord, Lord Addington, explained, these amendments would place on the face of the Bill a commitment for Ofcom to establish and maintain—the important word here is "maintain"—a disabilities and older people's advisory board. Last week the chief executive of Ofcom, Stephen Carter, undertook a commitment that Ofcom would establish,
	"a standing committee on matters concerning disabled people".
	As I understand it, this will be a high-level committee with both consumer representatives and industry stakeholders. It will have a wide, holistic remit covering access to services, representation in the media and employment in broadcasting.
	Members on these Benches warmly welcome that announcement. It gives an indication that Ofcom recognises the importance of disability issues in the communications industry and plans to make them a priority. With these amendments we seek to probe the Government as to whether they will take a step further and give the new board a statutory footing. That would guard against future abolition under different personnel and give it the stature it deserves and needs to attract the best people and get buy-in from industry and other stakeholders.
	There is a real risk that without placing the disability and older people's advisory board on the face of the Bill it will dissolve after a few years if Ofcom finds itself with a different set of priorities. Evidence suggests that where such organisations are not written into legislation, the tendency is for them to wither over time. Oftel set up a consumer panel which had no statutory underpinning, and subsequently it has been abolished. On the other hand, in the Telecommunications Act 1984, a statutory advisory body was created on disability and older people. DIEL has been a highly effective body of expertise. For the Government to reject this amendment could be perceived as a step back or a downgrade for disabled persons in the communications sector, in which case I shall be most interested to hear what the Minister has to say on this issue.

Baroness Wilkins: My Lords, I speak in support of Amendments Nos. 31, 32 and 46. I agree with all that the noble Lord, Lord Addington, and the noble Baroness, Lady Buscombe, said.
	I, too, was delighted to hear Stephen Carter, Ofcom's chief executive, announce at the Broadcasters Forum on Disability that he was laying plans before his board to set up a standing committee to advise Ofcom on issues affecting disabled and older people. With such a commitment, the purpose of this amendment has been accepted in principle. All that is needed is for the Minister to ensure that that commitment is not lost.
	It is essential that a commitment to maintain an advisory committee for disabled and older people is on the face of the Bill. With such a fast-changing industry, the complex and wide-ranging needs of disabled people in relation to all the areas covered by Ofcom can too easily be forgotten. The Disability and Older People's Coalition, which is made up of a large number of leading disability organisations, remains concerned at what might happen under a different leadership of Ofcom or under a government less committed to social inclusion. There is no guarantee that such a committee, and all its expertise and good work, would not be jettisoned. The Minister may well try to provide reassurance that that would not happen but, as the noble Baroness, Lady Buscombe, said, it has happened before. Oftel set up a consumer panel without specific statutory provision and then later abolished it.
	The purpose of Amendments Nos. 31 and 32 is to ensure that that cannot happen. If it was considered essential to set up DIEL back in 1984 before the era of mobiles, digital radio and multi-channel TV, giving Oftel a statutory advisory committee on matters affecting disabled and older people, how much more pressing it seems today. This Government have done more than any other to take action against social exclusion. I am sure that the Minister accepts the threat of exclusion which disabled and older people face in relation to communications services and trust that he will see the case for these amendments.
	Similarly, Amendment No. 46 seeks to ensure that the consumer panel—the body charged with holding Ofcom to account on behalf of consumers—can carry out its duties in respect of disabled and older people effectively. The consumer panel must inform itself about the needs of disabled and older people and have regard to their needs in carrying out its functions. If it is to be effective in those duties and make a meaningful contribution to the future inclusion of disabled and older people in the digital revolution, it must draw on a wide range of expertise and establish its credibility with disabled and older people. The odd person on the panel will not be able to do this—they cannot hope to cover the wide range of access barriers confronting different groups of disabled people. Nor is it acceptable to expect disability and older people's groups to help the panel unless they are resourced to do so. Without a statutory committee these resources are highly unlikely to be made available.
	Not only do the whole disability sector and Age Concern back this amendment but support comes from the industry too. BT has backed the establishment of such a committee so that it can go to one place and get informed, holistic and reasonable guidance on improving its services for disabled people. It is essential that a specific advisory committee is placed on the face of the Bill.
	The range of issues and challenges in relation to disabled and older people in this area is vast which is why these amendments seek to ensure that both Ofcom and the consumer panel are required to maintain permanent disability and older people's committees. DIEL has been forced to carry out both roles but that was only for telecommunications. Now we have a body dealing with every type of communications service and an even greater range of challenges.
	If disabled people and older people are to have faith in Ofcom and the consumer panel, they must have a voice and a place within each and this must be specifically provided for on the face of the Bill. I urge the Minister to think again and accept these amendments.

Lord Ashley of Stoke: My Lords, even in the presence of my noble friend Lord McIntosh I shall make a very brief speech. The brevity arises from the fact that the case has been substantially made in the splendid speeches of the noble Lord, Lord Addington, and his supporters. All I want to say is that the All-Party Disability Group strongly supports these amendments. Disabled people are genuinely fearful that if the measure we are discussing is not on the face of the Bill it can easily be eroded. The case made by the noble Baroness is a very strong one. Past experience shows that these committees wither away. They have no value unless they are incorporated on the face of the Bill. I am sure that my noble friend will take account of that point and do what he can to help.

Lord Carter: My Lords, I wonder if when my noble friend replies he can deal with the very important point that was made by the noble Lord, Lord Addington, and the noble Baroness, Lady Wilkins, on the problem that arises if there is one disabled person on the panel. At the moment I believe that there is a blind person on the consumer panel. I believe the whole House will understand that the requirements of blind people differ from those of the deaf and those disabled people who use wheelchairs and, indeed, from those of older people. The matter cannot be dealt with by one disabled person serving on the consumer panel.
	As I understand it, all telecoms companies are to be required by their general conditions of entitlement to consult the consumer panel on services for disabled people. If that is the case, I am not sure how that panel will receive the advice it needs on the range of services which need to be provided for disabled people if there is not a committee to advise it or other advice is not made available to it. I should be grateful if my noble friend could deal with that point when he replies to Amendment No. 46.

The Lord Bishop of Manchester: My Lords, I add support from these Benches to the points ably made by the noble Lord, Lord Addington, and other speakers, and particularly to the points raised by the noble Lord, Lord Carter. The arguments are persuasive for a specific advisory board, and for it to be laid down in the Bill. As has already been said, the Minister represents a government who have a good record in these spheres, so I hope that he will be sympathetic to the amendment.

Lord Peyton of Yeovil: My Lords, I do not feel very comfortable at finding myself in a minority of one. Personally, I marvel at the degree of faith placed in the suggestion that yet another committee be appointed. Although I am happily not all that disabled, I may at least be older than anyone who has spoken so far. Therefore, I feel that I can speak on behalf of old people. I would take no comfort whatever if the Government were minded to accept the amendment.
	I cannot believe that the noble Lord, Lord Currie, and his colleagues are really in need of yet another committee strung round their necks. The Bill, in terms of the instructions it contains for Ofcom, is already an indecently large affair. I see no need to complicate matters further. It would be absurd. I do not want anyone to say that I do not sympathise with either old people or the disabled, and I hope that no one will waste their time doing so. However, I do not believe that appointing such a committee would in any way help. I find it inconceivable that the noble Lord, Lord Currie, and the very substantial staff whom he will need will for a moment be either so stupid or so insensitive as not to take the greatest possible trouble to see that the needs of old people and the disabled are fully met.

Lord Currie of Marylebone: My Lords, I want to emphasise that Ofcom announced last week—my chief executive announced in a speech—that we will set up a panel of this kind, precisely because we think that it will have considerable value. Disability is one of those genuinely wide-ranging issues that spans the whole spectrum of Ofcom's activities, and that can be well tackled by a converged regulator. A panel of that kind will be extremely helpful in guiding and informing the work of Ofcom.

Baroness Howe of Idlicote: My Lords, I am sorry to disagree with the noble Lords, Lord Peyton and Lord Currie. I go back to a comparison with the little debate that we had on ethnic groupings, and why it was still important at this stage to have them firmly in the Bill. The whole approach may not have been firmly embedded in the same way as for other groups—to some extent I include gender—that have been more absorbed.
	I want to refer briefly to very thorough research that we did at the Broadcasting Standards Commission—it was some time ago—which gave two clear indications from the wide groupings of different disabled people. First and foremost, they wished to be treated as individuals. Secondly, they wanted a body that was representative of all their problems, that would bear them in mind, and that would ensure that whatever legislation was passed would consider their problems. I suppose that we should all declare an interest so far as age disability is concerned, and it may be an issue in future.

Lord Currie of Marylebone: My Lords, the noble Baroness indicated that she was in disagreement with me. I am not quite sure of the basis of that disagreement.

Baroness Howe of Idlicote: My Lords, I apologise. Certainly I was in disagreement with the line taken by the noble Lord, Lord Peyton. My disagreement with my noble friend Lord Currie was not on the intention of Ofcom, which is highly desirable—we have heard it spelt out already—but much more with the fact that I still consider there to be a need for a more statutory body in the Bill.

Lord Peyton of Yeovil: My Lords, I am not altogether disturbed by the disagreement of the noble Baroness with me. I am glad to know that Ofcom will appoint a body that it considers necessary, but for us to do so seems absurd. She is not doing herself justice in supporting that.

Baroness Howe of Idlicote: My Lords, I totally accept that it is the noble Lord's right to disagree with my view. I still wish to stand to that view.

Lord Evans of Temple Guiting: My Lords, I shall start on a positive note. We will consider the principle of stating in the Bill a requirement for Ofcom to establish a committee for the disabled and elderly with a statutory base. Of course, the Bill already provides that Ofcom will be bound by statute to establish an advisory body to advise it on the consumer interests of, among others, disabled people, the elderly and those on low incomes. That is a key function of the consumer panel.
	What noble Lords see in the Bill is a sturdy framework on which the consumer panel can build and which Ofcom must provide. The top level is the membership of the panel, representing the diversity of consumers across the UK. As a whole, the panel will be responsible for giving informed advice on, among other matters, the interests of the disadvantaged, the disabled and the elderly. The top level is supported by five important pillars.
	The first pillar is the list of matters on which the panel must be able to advise, set out in Clause 15(3)(a) to (k). That includes the cost of services, their provision and availability, apparatus—televisions, set-top boxes and remote controls—standards of service, information about service standards and so on. The second pillar is the power to carry out and publish independent research, in Clause 15(6)(b). The third pillar is the panel's freedom to advise other bodies as it sees fit, in Clause 15(2). Fourthly, the panel has a duty to have regard to the interests of a diverse range of consumers including the disabled and the elderly, who are named constituents of the panel, in Clause 15(6). Finally, the panel must have the power to organise itself and set up its own committees, under Clause 17(1) and (2).
	I shall now move Amendment No. 34. In Committee, we considered an amendment tabled by the noble Lord, Lord McNally, and the noble Viscount, Lord Falkland, to require the consumer panel to produce an annual report. It will add the vital elements of accountability and transparency to the work of the panel—

The Countess of Mar: My Lords, I am sorry to interrupt the Minister. He said that he now moved Amendment No. 34; in fact, he is speaking to Amendment No. 34.

Lord Evans of Temple Guiting: My Lords, I beg the House's pardon. I will move Amendment No. 34 in its place, and I thank the noble Lord, Lord McNally, and the noble Viscount, Lord Falkland, for their recommendation.
	As I said, the Bill is a sturdy framework on which the consumer panel can build, and I do not think it necessary or desirable to add further detail to the legislation, as required by Amendment No. 46. The panel has all the powers that it needs, and has the duty to provide informed advice about the interests of disabled and elderly people across a broad range of issues. Having heard the debate, we will consider the composition of the panel, as raised by several noble Lords this morning, when we consider Amendment No. 31.
	Moving on to Amendment No. 35, this has not been spoken to, so there is no way I can reply to it.
	I have already signalled our intention to consider the principle behind Amendment No. 31, but I cannot accept it outright, and I must resist Amendment No. 32 for a number of reasons. Principally, both amendments risk creating duplication of the work of the consumer panel and the content board, and they seek to do in legislation what Ofcom would itself have to do as a matter of operational necessity.
	It is incredibly difficult for a regulator, bogged down in the detail set out in statute, to serve its true constituents—citizens and consumers. It is the very people whose interests we are trying to champion who will suffer from an inflexible regulator that cannot move and respond to changing needs and circumstances. The needs of people with disabilities and those of the elderly will always have to be addressed and their interests taken into account. The Bill provides for that. Ofcom will be able to serve the interests of those groups better if it is not tied into inflexible legislation.
	However, as I have signalled, we will consider Amendment No. 31, given the strength of feeling expressed about it today. But the practicalities of setting up committees should not be for the parliamentary draftsman or the lobby group to try to translate into legislation. That is why we must resist Amendment No. 32. The chairman and his board of experts, with a finger on the pulse of the new organisation, are best placed to decide how to structure their organisation. As was mentioned earlier today, Stephen Carter has done just that, announcing on 12th June his intention to set up a standing committee on disability issues.
	We have set clear objectives. Ofcom must have regard to the needs of persons with disabilities, of the elderly and of people on low incomes. We have placed many provisions throughout the Bill to support these objectives. We have appointed a respected chairman, acting in the public interest, and we should let him and his board get on with the job.
	That said, I hope that in the light of the commitment I have given to consider Amendment No. 31, the noble Lord, Lord Addington, will withdraw the amendment and will not move Amendment No. 32.

Lord Addington: My Lords, we always, of course, prefer the words that we seek to include in a Bill to be accepted outright. However, the Minister's response has been one of the more positive responses I have received.
	I thank everyone who has taken part in the debate. The noble Lord, Lord Currie, however, denied me the opportunity of catching the noble Lord, Lord Peyton, on the hip. I was quite looking forward to that, as the opportunity does not often arise. However, I am sure that we shall be able to fence again at another point.
	Given the Government's assurance that they will address this issue and follow the lead of people outside who are dealing with these matters, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 32 not moved.]
	Clause 15 [Consumer consultation]:

Baroness Buscombe: moved Amendment No. 33:
	Page 17, line 5, leave out from "matter" to end.

Baroness Buscombe: My Lords, before making substantive points on the amendment, perhaps I may clarify exactly what we want to see deleted from the Bill as I am slightly concerned about the wording of the amendment. I have no doubt that, in terms of drafting, the wording is correct—although I shall check on that, or perhaps the Minister will be able to assure me that I am correct. I hope that the wording gives effect to our intention, which is to delete the words in brackets:
	"(other than one referred to them for advice by OFCOM)".

Lord McIntosh of Haringey: My Lords, I can confirm that that is what the amendment does.

Baroness Buscombe: My Lords, I am grateful to the Minister. That helps to clarify what I am about to say.
	The House will recall that in Committee on 15th May, in a debate about the consumer panel, we discussed my Amendment No. 66 which sought to avoid overlaps between the content board and the consumer panel by making it clear that the consumer panel had no remit over content. That reflected widespread concerns expressed to me by content providers about the potential double jeopardy between the content board and the consumer panel and the need for clearly defined boundaries between the two.
	What was incorporated into the Bill following a rather short debate was government Amendment No. 65 inserting the words,
	"(other than one referred to them for advice by Ofcom)".
	The Minister said that the purpose of the amendment was to give the consumer panel the power to consider matters of content referred to it by Ofcom and that these could be matters which had a "high consumer dimension". He gave the example of "misleading advertising".
	I accepted at the time that the Government's intention was to define limits on the consumer panel's role as regards content. However, some content providers are concerned that there will now be overlaps between the panel and the content board, and that there is a danger of "double jeopardy". I am grateful to the Minister for giving me the opportunity to discuss the point with him between Committee and Report.
	The Advertising Association is very concerned that misleading advertising was specifically cited as an example of an issue which could be referred to the consumer panel for advice, as it also foresees overlaps between different bodies on advertising. It had previously understood that, as thinking on the content board developed, government policy had moved on from the White Paper in which that was originally proposed.
	Although the Advertising Association recognises that it is important to consumers that misleading advertising is prevented, the instances of upheld complaints about misleading advertising are very limited because of the stringent controls and pre-vetting procedures which are in place. It therefore questions why misleading advertising should have been singled out for attention by the consumer panel.
	My Amendment No. 33 would restore Clause 15(5) to the clarity it achieved prior to the government amendment in Committee. The advertising industry and broadcasters who have supported the move to a single regulator did so because they believed it would reduce the regulatory overlaps and duplication that currently exist between various regulatory bodies. We should not recreate that problem in the new regulatory regime. I beg to move.

Lord Thomson of Monifieth: My Lords, I strongly support what the noble Baroness said. The role of the consumer panel as proposed in the Bill is a very important one. Under this clause, it has a range of responsibilities that are of great importance. It is vital that the line should be absolutely clear-cut between the responsibilities of the content board and the consumer panel.
	This affects advertising in one respect, but even more importantly it affects the whole function of the content board in ensuring the quality and diversity of programmes and their separation from matters of an economic character.
	On the advertising side, the noble Baroness is absolutely right. The idea of misleading advertising being one of the dimensions on which the consumer panel might be entitled to have a view was perhaps an unfortunate slip of the tongue. The arrangements within the television industry for regulating advertising have worked admirably over many years. They are under active and constructive consideration at present. I listened to an interesting speech delivered recently by the noble Lord, Lord Currie, at an Advertising Association luncheon in which he referred to looking for a means of marrying the self-regulatory principle of the Advertising Standards Authority to the statutory backing that is inevitable in terms of television advertising.
	All that works admirably, but to work admirably it is important that the borderline between the responsibilities of the consumer panel and those of the content board should be absolutely clear cut. It is equally important that the content board should be distinctively separate from all the other many responsibilities in the field of economic competition that lie within the responsibilities of Ofcom.

Lord Evans of Temple Guiting: My Lords, it has always been our policy that Ofcom should be able to seek advice from the consumer panel on matters of content where there is a high consumer dimension. We made that clear in paragraph 7.5.2 of the White Paper, A new Future for Communications, and in paragraph 4.3.2 of the policy document published alongside the draft Communications Bill. The Joint Scrutiny Committee supported this position when it examined the draft Bill, in paragraph 48 of its report.
	The amendment that we made in Committee, which this amendment seeks to reverse, does not extend the panel's mandate to content. It merely clarifies what has been our intention from the start and resolves any apparent inconsistency that existed between Clause 15(5) and Clause 15(6).
	I understand that there is some concern in the advertising industry that this will lead to double jeopardy. Although the consumer panel will be a powerful voice for consumers, it has no regulatory functions. Its function is to provide advice to Ofcom and other bodies as it sees fit. It is simply not possible for the panel's advice on a content matter referred to it by Ofcom to present some form of double jeopardy for industry or overlap with the work of the content board. Regulatory functions rest with Ofcom, and, where conferred on it, the content board.
	The consumer panel will be able to advise on content issues only where specifically requested by Ofcom. I do not agree that this is the thin end of the wedge. The panel is a statutory body and will not be able to go beyond the boundaries laid down in statute. In the content board, Ofcom has already begun to develop the proper structure and expertise to handle content matters, and the board will be best placed, within the regulatory framework, to do that job.
	I will not speculate or try to give examples of what Ofcom might or might not refer to the panel. The example of misleading advertising, which we used at Committee Stage when explaining the amendment, was used purely for illustrative purposes, and not singled out for special treatment. There is no perception in government that this is a problem area.
	It is Ofcom that will decide when a matter has a "high consumer dimension", and Ofcom that will decide whether, if it needs advice on that matter, the consumer panel would be best placed to provide it. I hope that my answer provides the reassurance that the noble Baroness was looking for and persuades her to withdraw her amendment.

Baroness Buscombe: My Lords, I thank the Minister for his response. I also thank the noble Lord, Lord Thomson, for his support of the amendment. As the noble Lord, Lord Thomson said, it is important to clarify this crucial borderline between the responsibilities of the consumer panel and the content board. It is important to address this borderline, because there is tremendous concern in the industry that this clause, as it stands, muddies the water, not least because there is no question but that self-regulation really works in the advertising industry. We on these Benches want to be sure that nothing in the Bill will undermine the advertising industry's ability to regulate itself successfully.
	The Minister says that it is in Ofcom's hands to decide whether to seek advice from the consumer panel on matters with a high consumer dimension. I am grateful that the Minister has made that clear. I am also grateful that the Minister has explained that the term "misleading advertising" was used as an example purely for illustrative purposes and that he explained that there is no perception in government that this is a problem area.
	I should have much preferred the Minister to have accepted our amendment to clarify the situation once and for all and to assure the industry, because I still think that this wording is unnecessary. I do not think that it helps the process. I do not think that it helps Ofcom. I will not press this today. I will go back to people in the advertising industry and ask them. They are the experts—they know. I will consult the Advertising Association in particular about whether it is happy about what the Minister said today.

Lord McNally: My Lords, before the noble Baroness sits down, is she aware that had she pressed the amendment, we would have supported her in it? We would gladly join her in any further consultations with the advertising industry.

Baroness Buscombe: My Lords, I thank the noble Lord, Lord McNally, for his strong support. I will take on board his assistance in this matter. Together we will consult the advertising industry, and, on that basis, we will perhaps return to this matter and press it at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey: moved Amendment No. 34:
	Page 17, line 46, at end insert—
	"( ) The Consumer Panel must—
	(a) as soon as practicable after the end of the period of twelve months beginning with the commencement of this section, and
	(b) as soon as practicable after the end of each subsequent period of twelve months,
	prepare a report on the carrying out of their functions in that period.
	( ) The Consumer Panel must publish each report—
	(a) as soon as practicable after its preparation is complete; and
	(b) in such manner as they consider appropriate."
	On Question, amendment agreed to.
	[Amendment No. 35 not moved.]
	Clause 16 [Membership etc. of the Consumer Panel]:
	[Amendments Nos. 36 to 42 not moved.]
	Clause 17 [Committees and other procedure of the Consumer Panel]:
	[Amendments Nos. 43 to 46 not moved.]
	Clause 24 [Training and equality of opportunity]:

Lord Gordon of Strathblane: moved Amendment No. 47:
	Page 23, line 6, leave out "television and radio" and insert "broadcasting and telecommunications"

Lord Gordon of Strathblane: My Lords, I raised this matter at the Committee stage. If the object of this Bill is to bring together telecommunications and broadcasting, it seems a little lopsided, to say the least, that the training provision applies solely to broadcasting. To be fair, the Minister said that she was sympathetic to the aims of the amendments, but Ofcom cannot be given any power under the regulatory regime permitted by EC communications directives to impose any obligations in this area on communications providers.
	That seems a little strange, but, not being particularly knowledgeable in the field of European directives, I consulted the Communication Workers Union. I said that this could not be right, and asked it to provide me with some ammunition. It furnished a couple of documents, including a Green Paper from some time ago, which said:
	"Consideration in this context must also be given to the need for retraining and redeployment of employees as the traditional telecommunications sector adapts to a competitive environment".
	It may be that there is scope for doing that under European directives, in which case perhaps my amendment could be accepted. If, on the other hand, I am wrong, and the Communication Workers Union is wrong, if the Government accept that it is a good idea that communications workers are trained, how will they find a way around the problem? I beg to move.

Lord Evans of Temple Guiting: My Lords, I am grateful to my noble friend Lord Gordon for giving us sight of the European documents that he mentioned. I have no doubt that they are representative of the views of the European Commission and the European Information Society at that time. Indeed, no-one doubts the importance of training, nor that companies have an important role to play in the teaching and learning process.
	In the UK, a new set of sector skills councils is being created to lead the skills and productivity drive in industry and the business sectors recognised by employers. I am pleased to say that the sector skills councils of relevance to the communications sector are among the first to be fully licensed by the Government: eskills UK, with a sector coverage of IT, telecommunications and contact centres, and Science, Engineering, and Manufacturing Technologies Alliance, covering engineering, manufacture and some science occupations, received their licences on 8th April. The audio-visual industries are represented by the existing Trailblazer sector skills council. It may be that the Commission's thinking may have developed further since 1996. In any event, the directives which we have now implemented and work within, were agreed last year, following a comprehensive review of Community regulation of the telecommunications sector, which commenced in 1991. As we explained earlier, it would not be compatible with that framework to place any training-related obligations on communications providers as such.
	We are bound by the limitations of the directives, and the simple fact is that Ofcom will not be permitted to impose any obligations of that type on communications providers. The directives limit the type of obligations that can be imposed on providers of electronic communications. The scope of the general obligations, which apply to any provider, is set out in Clause 48. In very broad terms, it covers such matters as consumer protection, service, interoperability, network access, availability of service in the event of a disaster, protection of health and compliance with international standards.
	There is no provision for any kind of obligation in relation to training, and member states have no discretion to add other kinds of conditions that go beyond those allowed by the directives. Thus, any duty on Ofcom to promote training in those industries would be legally ineffective. I hope that in light of my remarks, the noble Lord will feel able to withdraw the amendment.

Lord Gordon of Strathblane: My Lords, I will obviously withdraw the amendment at this stage. However, it is regrettable that we do not have an obligation on Ofcom to do something to encourage training—not to provide it or even to fund it but simply to encourage it. However, I must accept the Minister's assurance that we are simply not allowed to do so by Europe. However, I do not regard European directives as having come down from Mount Sinai by second post after Moses. This does not appear to be a particularly sensible directive and I hope that at some point in the future we will find time to change it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Addington: moved Amendment No. 48:
	Page 23, line 16, after "of" insert "and equalisation of opportunities for"

Lord Addington: My Lords, in moving this amendment, I shall speak also to Amendment No. 49.
	In Committee, the noble Lord, Lord Carter, drew our attention to the phrase "fair"—this is an odd word—treatment. We were not sure what it meant. I remember the noble Baroness, Lady Blackstone, saying that it was a known concept but I have never come across it previously. That is when the alarm bells start to ring. The phrase "equalisation of opportunities for" gives a much better idea of the normal practice with regard to disabilities. In this area of civil rights one invariably must change at least the way in which one behaves to give civil rights to someone. For example, the idea of reasonableness that is enshrined in the DDA means that one must make a reasonable adjustment. I do not know whether being fair involves making a reasonable adjustment; my point is that simple.
	If we added the phrase "equalisation of opportunities", that would be in keeping with the approach. It is reasonable that one should, for example, provide ramps or change furniture in an office for someone in a wheelchair. I also refer to the concept that is accepted by the "Access to Work" scheme of providing a reader/writer for dyslexics. Those are examples of what is done to get people with disabilities into the workplace.
	I do not know how far the concept of fairness addresses that. The situation is very worrying. What does being fair mean? To be fair to whom? Compared with whom? I do not know what is meant. There is no clarity.
	Amendment No. 49 states:
	"between disabled persons and persons who are not disabled; and . . . between persons who have had disabilities and persons who are not disabled and have not had any disabilities".
	Those lines were originally in the draft Bill. I should be less worried about the concept of fairness if those lines were in the Bill. It would not be as good but it would still be better.
	The amendments are intended to clear up an area in which we are creating confusion. We do not seem to be in alignment with earlier legislation. I refer to the idea of reasonable adjustment. I suggest that the Government should agree to the amendments because the current wording in the Bill simply adds confusion. I beg to move.

Lord Carter: My Lords, I can be extremely brief. I understand from some signals that the Government will look extremely positively on this amendment. We are grateful to them if that is what they will do. All we have done—I say "we", but I should refer to the noble Lord, Lord Addington, because I am simply an interested bystander—in Amendment No. 49 is to put back in the Bill the words that were in the draft Bill. We never understood why they were removed in the main Bill. I understand that the Government now intend to put them back, which is a very good idea.

Baroness Buscombe: My Lords, I rise to support Amendments Nos. 48 and 184, to which I have added my name. I confess that when my attention was first drawn to the wording of Clause 24 with regard to employment of disabled persons, I was somewhat taken aback. "Fair treatment of disabled persons" sounds condescending to me, not to mention the fact that it could be used to hide a multitude of sins. It would be virtually impossible to prove that an employer did not treat a disabled person "fairly", as it refers to a process—that is, "treating fairly"—rather than an outcome which can be easily referred to, to examine whether or not the employer satisfied the commitment to secure,
	"equalisation of opportunities for disabled persons",
	as our amendment suggests. I will stop there because I believe that the Minister is eager to get to his feet.

Lord Evans of Temple Guiting: My Lords, I hope that I will rise to everyone's expectations. Amendment No. 48 would require Ofcom to take all such steps as it considers appropriate for promoting the "equalisation of opportunities" for disabled persons in relation to employment with broadcasters. Similarly, Amendment No. 184 would require Ofcom to include conditions in the licences of broadcasters to whom Clause 330 applies, requiring them to promote the "equalisation of opportunities" in relation to employment with them. That would, I assume, be instead of the current requirements to promote the "fair treatment" of disabled persons, although the amendment could be read as requiring both fair treatment and equalisation of opportunities. That would clearly be unnecessary.
	We are aware of the concern that the term "fair treatment" is not in line with the terminology used in other disability legislation. The use of the term mirrors the current obligations in the Broadcasting Act 1996 and is well understood in the context of that legislation. The obligations have served us well, and have stood the test of time. They have helped to contribute to an impressive range of measures to promote disability issues, such as the development of workshops on the portrayal of disabled people, guidance on being more inclusive of disabled people both in front of and behind the camera, and systems of regular reporting. It is for that reason that we are extending the obligations in the 1996 Act to cover all licensed broadcasters.
	That said, I am aware that more recent disability legislation, such as the Disability Rights Commission Act 1999 prefers the term "equalisation of opportunities". I do not believe that the terminology makes any difference to the substantive requirements in the Bill, but I can see how it may be helpful for our legislation to be as consistent as possible with other legislation in the area. We will therefore bring forward an amendment at Third Reading to substitute our reference to "fair treatment" with the more up to date term, "equalisation of opportunities". I hope that in the light of that, the amendments will not be pressed.
	The intention behind Amendment No. 49 seems to be to specify that in addition to the term "equalisation of opportunities", which is used in Clause 24 in relation to disabled persons, there should also be a reference to equality of opportunity between disabled persons and persons who are not disabled; and between persons who have had disabilities and persons who are not disabled and have not had any disabilities. I believe that that is unnecessary and, in fact, would be positively unhelpful. The amendment is inconsistent with the Disability Discrimination Act, which does not confer rights on non-disabled people.
	During the debate on 15th May, it was rightly pointed out that the earlier draft of the Bill contained language similar to that proposed in this amendment. That was, of course, an error, which was discovered only after the draft Bill was published. Again, that shows the value of the extensive consultation that has taken place on the Bill.
	I hope that my response has helped to clarify the position. We cannot accept the amendment, and I trust that it will not be pressed.

Lord Addington: My Lords, as they say, a brace is quite a good haul. I thank the noble Lord for his response. I believe that we shall probably want to check his comments on Amendment No. 49, but I assume that the noble Lord's lawyers are good ones.
	With regard to Amendment No. 48, I believe that everyone is now more aware of what is going on. A point of confusion has been removed and, having had those assurances from the Minister, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 49 not moved.]

Lord Puttnam: moved Amendment No. 50:
	After Clause 24, insert the following new clause—
	"BACKSTOP POWERS IN RESPECT OF TRAINING
	(1) In pursuance of their duty specified in section 24(1), OFCOM may, in the circumstances specified in subsection (2), exercise the powers granted under this section.
	(2) Those circumstances are that—
	(a) OFCOM are not satisfied that adequate opportunities for the training and retraining of persons for employment and work in connection with the provision of television and radio services are being provided, and
	(b) OFCOM are satisfied that the failings identified in accordance with paragraph (a) cannot be remedied by the exercise of their relevant powers under section 330.
	(3) OFCOM may impose a training levy to be fixed by OFCOM in accordance with the provisions of this section.
	(4) OFCOM shall not fix any training levy unless—
	(a) at the time the levy is fixed there is in force a statement by OFCOM of the principles that OFCOM are proposing to apply in—
	(i) fixing the levy; and
	(ii) distributing the receipts of the levy; and
	(b) the levy is fixed in accordance with those principles.
	(5) Those principles must be such as appear to OFCOM to be likely to secure that—
	(a) the levy is fixed in such a way as to ensure that levels of payment of the levy relate to the benefits to those paying the levy of the training and retraining to be provided; and
	(b) the money received from the levy is expended in ways that relate to OFCOM's duty under section 24(1)."

Lord Puttnam: My Lords, there is not a great deal to add to what I said in Committee. I live in hope that at Third Reading the Government will either come forward with their own adaptation or accept the amendment.
	The situation is really quite simple. Here is an industry which is entirely skills-dependent. I believe that that is generally agreed. The nature of those skills changes very rapidly. It is a technology-based industry. The Government have a commitment in their manifesto to encourage industries to pursue aggressive training policies and broaden their scope where possible, and the industry has done exactly that. It has an all-industry body and all-industry agreement on training. The purpose of the amendment is merely to empower Ofcom, where necessary, with backstop powers to pursue non-payment.
	It is an industry where the majority pay, pay well and pay willingly but, unfortunately, where a number of backsliders—some significant and some minor—will avoid and evade the commitment which the industry itself has made. It seems entirely appropriate that Ofcom should have powers to pursue non-payers in whichever way the Government or Ofcom consider appropriate. The present situation is too slipshod and the burden falls too heavily on those who have offered and shown preparedness to pay for training. I beg to move.

Lord Peyton of Yeovil: My Lords, as my name is attached to the amendment, I rise briefly to support what the noble Lord, Lord Puttnam, said. I particularly endorse what he said about the present situation being altogether too slipshod. The need in this industry—perhaps above all others—for training is too obvious to be ignored. Frankly, I believe that it would be wrong if we allowed training to remain on a voluntary basis. The black sheep who default in the cause of training should be brought into line. I hope that on this occasion, if on no other, my endeavours to say something that pleases Ofcom will even commend themselves to the noble Lord, Lord Currie.

Lord Thomson of Monifieth: My Lords, we on these Benches strongly support the amendment moved by the noble Lord, Lord Puttnam. I should declare an interest. I have a daughter who is in the management of the BBC and who owes a great deal to the training that the BBC provided. It was postgraduate training of a very high quality. In those far-off days, the BBC carried an undue burden of training throughout the broadcasting industry. I believe it is fair to say, as the noble Lord, Lord Puttnam, indicated, that that burden is now far more evenly spread. However, some areas within the industry would require the kind of statutory compulsion provided by the proposed levy. I hope that the Government will deal sympathetically with what the noble Lord has proposed.

Lord Evans of Temple Guiting: My Lords, Amendment No. 50 seeks to insert a new clause proposing to give Ofcom power to impose a new training levy if it is not satisfied that adequate opportunities for training and retraining are being provided and if those failings cannot be remedied by exercising relevant powers under Clause 330. The new clause goes on to indicate how Ofcom should fix the levy and how receipts of the levy should be used.
	As my noble friend Lady Blackstone made clear when we debated the same amendment in Committee, we recognise the crucial importance of a well trained workforce to the broadcasting industry. Without the highly skilled workers it needs, the industry will struggle to remain competitive in the world media market place. The nature of the industry and the characteristics of much employment within it only serve to underline that stark truth.
	Because of our recognition of those facts, we have introduced the new, strengthened provisions on training in the Bill. For the first time, training obligations will apply to all television and radio broadcasters who meet the threshold conditions set out in the Bill, and Ofcom will have a new duty to promote training more widely in the sector.
	In Committee, we also indicated that we would consider an amendment tabled by the noble Lord, Lord Crickhowell, designed to ensure that the training requirements apply to companies which, while individually small, are part of a much larger group of companies. We have tabled amendments for discussion next week on this topic. Those provisions put the broadcasting sector well ahead of most others, and we are confident that they will deliver the intended result.
	Much will depend on the licence conditions that Ofcom imposes under Clause 330 and the action that it takes under Clause 24. Following a recommendation of the ITC's programme supply review, the Secretary of State asked Skillset, the sector skills council for the audio visual industry, to establish a task force and report back to Ofcom on these very issues. Skillset and all the key stakeholders are already well advanced in their task.
	It is not clear from the amendment on whom the training levy would be imposed. Thus far, we have assumed that Clause 330 would apply to the licensed broadcasters, but the aim may be to catch independent producers who are not, of course, subject to Ofcom regulation. However, that would be extremely complex to achieve, requiring a whole new layer of regulation to ensure that independent producers identify themselves and to make arrangements for the levy and introduce sanctions if producers do not pay up.
	That does not mean that independent producers cannot or should not play their part in contributing to industry training. They can and they should. PACT, the trade body representing independent producers, has been operating the Independent Production Training Fund, with the support of the main broadcasters, since 1993. The Skillset task force, which I have just mentioned, is looking, among other things, at the scope for raising the current ceiling on contributions to the fund from independent producers. PACT is represented on the task force and I hope that it will make a positive contribution to the discussions. In the light of what I have said, I hope that the noble Lord will withdraw the amendment.

Lord Puttnam: My Lords, in withdrawing the amendment, I want to make two points. One is that clearly I and those who agree with me are seeking some mechanism whereby Ofcom can use the significant and broad powers that it has to, as it were, encourage those who believe themselves to be taking a free-rider position on training to join the body that pays and pays willingly. The noble Lord, Lord Davies, and I tend to meet—just the two of us—in this House only about once a year. On those occasions, we discuss the engineering and construction trade industries' training arrangements. There has never been a moment of dispute. The arrangements are regarded as very valuable by those industries and seem to work extraordinarily well. I suppose that, in essence, I am seeking a not dissimilar arrangement for the communications industry. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 28 [Transitional functions and abolition of pre-commencement regulators]:

Lord Avebury: moved Amendment No. 51:
	Page 26, line 31, at end insert—
	"( ) Where, under contractual arrangements in place prior to the commencement of this Act, liability is established for payment of charges levied by pre-commencement regulators, such arrangements shall continue to have effect after the abolition of the pre-commencement regulators as if they applied to charges levied by OFCOM."

Lord Avebury: My Lords, no doubt because of the inadequacy of my explanation of these amendments in Committee on 15th May, the Minister was not at the time fully aware of their purpose. As the noble Lord, Lord McIntosh, was good enough to acknowledge in a letter of 2nd June, what we are dealing with in Amendments Nos. 51 and 233 is the passing on of charges which have been levied by Oftel, even though after commencement they will be payable to Ofcom.
	As the Minister is now aware, the providers of masts and towers, who played a key role in the development of terrestrial radio and television services and who also license antenna space to mobile and fixed wireless operators, have clauses in all their contracts with these users to enable them to recover the charges imposed by the existing regulator. The amendments seek to ensure that the existing contractual arrangements continue to have effect as if any new charges levied by Ofcom were, for the purposes of those contracts, charges by the previous regulator.
	Secondly, in Amendment No. 232, we deal with rights and obligations established by reference to definitions contained in previous legislation. As far as we could see, there was nothing in the Bill to cover existing arrangements between broadcast transmission providers and service providers, although the amendment is not limited to agreements of that kind. As the Minister knows, the agreements between landlords and the owners of towers and masts often confer rights on the operators which allow the sharing of these rights with holders of Telecommunications Act 1984 licences only. The disappearance of those licences and of the distinction between broadcasters and other providers of electronic communications networks means that key permitted-use clauses in agreements between the operators of towers and masts and their customers would be invalidated, and they would be obliged to renegotiate amended contracts with their landlords.
	It appears that the Government have taken these points into consideration in their Amendments Nos. 227 to 231 and 234 to 235. We look forward to hearing their explanation of how the objectives that we outlined have been met—no doubt much more effectively than we were able to do.
	However, as far as I can see, paragraph 2A of Amendment No. 227 appears to safeguard the position of persons holding 1984 Act licences, while paragraph 2B of Amendment No. 227 addresses the problem of agreements with persons holding such licences by others. We are concerned, however, with the wording of paragraph 2B(1) of Amendment No. 227, which refers to the,
	"rights or obligations of a person under the agreement".
	This may not cover the agreements we had in mind, in which the landlord grants a power to the operators of masts and towers to let space to third parties who hold 1984 Act licences but who are not themselves parties to the agreement.
	With respect, we suggest that the amendment should make it clear that the expression "person under the agreement"—which could be taken as limited to persons party to an agreement—should be amended to,
	"person referenced under the agreement".
	In conclusion, there has still been no communication between the department and the operators of the towers and masts. It would have saved us time on the Floor of the House if there had been direct communication between officials in the department and those persons who are immediately concerned with these agreements. I hope that this residual point regarding paragraph 2B of Amendment No. 227 might be the subject of discussion between them before we reach Third Reading. I beg to move.

Lord Davies of Oldham: My Lords, I sought to rise early without pre-empting the debate, but no one else other than the noble Lord, Lord Avebury, is participating in the debate.
	Your Lordships will recognise that the government amendments to which I am speaking at this point are an attempt to meet the representations made in Committee. The noble Lord, Lord Avebury, is doing himself a disservice when he suggests that he had not put the case sufficiently well for his amendments to be accepted. We understood the issues clearly, and we hope that we have now provided a framework in the Bill for meeting his concerns.
	I am sorry to hear what he said about communications directly with the industry; the department prides itself on being as open as possible in discussions about the Bill. I do not know where the fault lies, but I doubt that it lies on our side. Nevertheless, our concern was that the issues having been raised by the noble Lords, Lord Avebury and Lord Crickhowell, in Committee, it was to those representations in the House that we directed our energies. I hope that I will be able to establish that in fact the government amendments meet the concerns to which Amendments Nos. 51 and 232 are directed.
	Your Lordships will recall that certain amendments on these matters were tabled in Committee, and we indicated that the Government were sympathetic to their concerns. Therefore, I am happy today to outline our solutions. I also hope to persuade the noble Lord, Lord Avebury, that these amendments are helpful to the concerns of the transmission company, Crown Castle, which lie behind his contribution.
	The Bill already makes transitional provision which is addressed to the effects which the advent of the new regime will have on private agreements. We sought input on these issues from the industry when the draft Bill was published last May, and accordingly included some provisions for such matters in the Bill—specifically paragraphs 8, 12 and 16 of Schedule 18. However, a group of legal experts—who were also advising the noble Lord, Lord Crickhowell, who is unfortunately unable to join us today—recently advised us that this provision is not wide enough. Their advice was that some of the impacts that were not caught could be adverse for the affected parties.
	We have considered these concerns in drafting our amendments, which we think will be of material assistance. As it stands, paragraph 3 of Schedule 18 prevents the triggering, merely as a consequence of the ending of licensing under the 1984 Act, of any provision in commercial agreements which might cause those agreements to cease to have effect or to be capable of being terminated. However, we were advised that there are many kinds of provisions in agreements, other than termination provisions, which could be triggered by the ending of licensing. These would not be caught by paragraph 3.
	We recognise that this could be a problem with serious consequences. The provisions in question might, for instance, trigger a situation of default under a finance agreement. It is impossible for the Government to know of all potentially affected agreements—much less to know in detail what is in them. We must therefore proceed with some caution.
	However, we think it possible to produce an effective solution by a general substitution, providing that this general rule can be adjusted by a court if necessary, when the general approach does not properly reflect what the parties would have agreed had they contemplated the abolition of the licences. The amendments therefore have the effect that any provision in such agreements which might be triggered by the end of licensing will instead be triggered by a long-term suspension of the right to provide services. This seems to be the nearest equivalent in the new regime which the Bill will inaugurate to the revocation of a licence in the old regime.
	In many cases, this substitution will be sufficient to prevent any seriously adverse consequences from the ending of licensing. Nevertheless, substitution of the most nearly equivalent event will not always be the right solution. We have therefore allowed for the possibility that any party to such an agreement can apply to a court for a direction that this substitution is not to be made, or is to be made only with such modifications as the court thinks right in all circumstances.
	We believe that this strikes the right balance. I hope that noble Lords who have taken a keen interest in these issues will find that the amendments effectively address the general concerns about agreements that are conditional on licensing which motivated in particular the amendments tabled by the noble Lord, Lord Crickhowell, in Committee.
	As regards Crown Castle's agreements, the amendments will be helpful. They will ensure at least that the ending of licensing under the 1984 Act will not lead to automatic termination or invalidation of any of its agreements, which was one of its significant concerns.
	I recognise that this will not meet every concern which the noble Lord has so clearly explained and that on many other points it may be necessary for Crown Castle to modify and update its agreements for the new circumstances. But, as I have emphasised, it is not possible for us to know all of the circumstances addressed by private agreements. Accordingly, we have to be cautious in making what after all is permanent provision once enshrined in the legislation.
	Where the parties to such agreements are not constrained from adjusting them to suit the new circumstances and can equitably do so, it is not likely to be appropriate to make general statutory provision which may have unforeseen and adverse impacts in a particular case.
	In the light of these amendments, therefore, I hope the noble Lord will feel we have addressed the issues raised by himself and the noble Lord, Lord Crickhowell, in Committee. We will examine the issue he has raised with regard to third parties and if we can improve the amendments to take it on board, we will do so at Third Reading. On that basis, I hope that the noble Lord will consider that the government amendments to be moved on Report meet the proper concerns that he has expressed.

Lord Avebury: My Lords, I thank the Minister for that helpful reply, particularly for his undertaking to examine the point I made about paragraph 2B(1) of Amendment No. 227. Provided we can be sure that the consideration of that problem is undertaken before Third Reading and that any changes in the wording of that paragraph are agreed between the department and the industry before that stage, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McNally: moved Amendment No. 52:
	After Clause 28, insert the following new clause—
	"FUNCTIONS OF OFCOM IN RESPECT OF PRESS COMPLAINTS COMMISSION'S CODE OF PRACTICE
	(1) It shall be the duty of OFCOM to make such arrangements as they think fit to provide for the enforcement of the Code of Practice issued by the Press Complaints Commission.
	(2) In pursuance of its duty under subsection (1), OFCOM may—
	(a) issue such directions as they think fit to the Commission, and
	(b) impose penalties in accordance with subsections (3) and (4).
	(3) OFCOM may impose a penalty on any party to the Code if that party has, in the opinion of the Commission, breached the terms of the Code.
	(4) A penalty under subsection (3) is to be such amount not exceeding £500,000 as OFCOM determine to be—
	(a) appropriate; and
	(b) proportionate to the breach of the Code in respect of which it is imposed.
	(5) In this section—
	"the Code of Practice" and the "Code" mean the Code of Practice issued by the Press Complaints Commission in December 1999 and any subsequent revision of that Code (including any such revision of the coming into force of this section),
	"a party to the Code" means any person engaged in the publication of a newspaper or magazine who has agreed to comply with its provisions, and
	"Press Complaints Commission" and "Commission" mean the body first established in 1991."

Lord McNally: My Lords, in some ways I feel as though I am about to lead the Charge of the Light Brigade in moving the amendment. After all, the noble Lord, Lord Currie, is on record as saying that he does not want powers over the Press Complaints Commission. The Minister, Tessa Jowell, says that she is against state regulation of the press—a noble declaration. I am sure that she is against murder of the first-born and is in favour of motherhood and apple pie, but that has nothing to do with what is being proposed in the amendment. I take confidence in the thought that my reading of history reminds me that the Charge of the Light Brigade captured the Russian guns—so let us go on.
	Looking back over the past 10 years, it is interesting to see just where we are in the relationship between Parliament, the politicians and the printed press. Ten years ago, the print press was in the "last chance saloon". The Calcutt committee had recommended that unless it mended its way, it should be supervised by a statutory tribunal. Clive Soley had introduced the Bill on press freedom and responsibility in another place. A report from the National Heritage Committee had called for a press ombudsman on privacy law. The possibility of an incoming Labour government certainly concentrated the minds, too, because every Labour government since the war had initiated either a Royal Commission into the press or a departmental inquiry into its behaviour. Yet there is no doubt who has left the "last chance saloon". It is the politicians rather than the press. It is still there, drinking gaily and with abandon as ever.
	This morning I attended a meeting with the president and CEO of the United States' public broadcasting service, Pat Mitchell. The noble Lord, Lord Sheldon, was there and he made an observation which I am sure he will not mind me repeating. He said that the watershed in the relationship was reached when the present Prime Minister, as Leader of the Opposition, travelled half way around the world to address a management conference of News International. And we all know what happened next.
	The relationship between the media owners and this Government is a depressing one. A senior journalist told me that he was once telephoned by one of the rather aggressive No 10. spin doctors complaining about the contents of an article. After some time, the journalist said, "If you don't like it, you should talk to my editor", to which the spin doctor replied, "We don't talk to editors, we talk to owners", and slammed down the telephone.
	It is not quite true because the relationship is also cosy with the editors, too. As someone who has an association with a lobbying company and therefore has to fill in great detail about what I am doing and what is being done, a few years ago I asked how many visits Rupert Murdoch had made to 10 Downing Street. I recall that he had made five as against one for every other media owner. Those meetings take place with no one knowing what happened, what was agreed or what deals were done. I believe that it is an unhealthy relationship. I would prefer the relationship between journalists and politicians to be the same as that between the dog and the lamp post. When they get any closer than that, there is danger.
	My reason for moving the amendment was instigated in part by the evidence given by the newspaper proprietors to the Puttnam committee. Anyone reading it or having attended will know that it was churlish and defensive—"Why are we here? What has this got to do with us?". When reading the evidence given recently to the DCMS committee, one finds the same attitude with the noble exceptions of the editors of the Guardian and the Independent. There is a feeling that it is none of Parliament's business. I begin from the basic principle that in a parliamentary democracy no individual or organisation is beyond the scrutiny of Parliament. Therefore, I believe that we have a right to discuss how our free press defends its own freedom.
	I was attracted by the discussion in the Puttnam committee that the print media could well come under the accredited self-regulation that is being encouraged for other parts of the media. When they say that the Bill is about the electronic media, I would point out that it is a communications Bill. It is not an electronic communications Bill or a broadcasting Bill; it is a communications Bill. In any case, convergence is bringing the print media into the electronic media. I attended a seminar addressed by the editor of the Guardian when he said that the newspaper now has more readers world-wide reading it on the Internet than are buying the printed version. So convergence will bring the print media into this debate.
	The proposal before the House—the issue has been discussed elsewhere—is not the slippery slope to state regulation described by one of the red tops in one of its less hysterical editorials. What I and others are after is an effective and respected Press Complaints Commission. It is no use saying, "We already have that". Journalists as varied in experience as Alan Rusbridger and Andrew Neil have stated recently that the PCC does not yet have the respect and confidence that it should. I have said previously that a target to aim for is that the Press Complaints Commission should have the same respect within its industry and by the general public as the Advertising Standards Authority. It is not yet there.
	I have great respect for the noble Lord, Lord Wakeham. However, for much of his term of office he seemed too often to be the apologist for the media rather than the regulator. I have said to the new chairman, Christopher Meyer, that he must beware of becoming the PR man for the press. One does not see the chairman of the Advertising Standards Authority rushing to defend every dodgy advertisement. The chairman of the Press Complaints Commission must be the regulator far more than hitherto.
	In two important speeches, Christopher Meyer has suggested improvements. The DCMS committee's recent report suggested others. This flurry of activity has coincided with parliamentary interest. It is important that we do not lose sight of the issue once the legislative spotlight is turned off. That is why I wish to have left in the Bill a small power for Ofcom. We cannot continue to be stressed by the state of our press without stating what must be done about it. I read with great pleasure the wonderful interview by the noble Lord, Lord Deedes, in the latest edition of the House Magazine. He says:
	"We journalists were pretty respectful towards the politicians in my day. I wore striped trousers and a black jacket and approached MPs as if they were superior beings".
	Those days are long gone. He also speculates that with the current press we would probably have lost the First World War because Lloyd George's philanderings would certainly have found their way into the News of the World. By the same token, we would have lost the Second World War because Jeremy Paxman would have exposed Churchill's drinking habits long before he got the chance to make any of his famous speeches.
	I want us to consider this matter seriously without the canard that those of us who put forward the proposal are against press freedom. I questioned the noble Lord, Lord McIntosh, after recent research by the University of Cardiff demonstrated massive public confidence in electronic news which had some statutory guidance but massive lack of confidence in the print media which did not. With great casuistry, the noble Lord was on his feet saying, "You want the same regulation for the print media as for the electronic media". That is good debating but it does not address the issue. Of course, I do not believe that newspapers can have the same responsibilities imposed upon them.
	I was impressed by testimony from the chairman of the committee, the noble Lord, Lord Puttnam, about his father and the background in journalism. Journalists should worry about standards and freedoms. It struck me as impressive that the 275 editors of the Murdoch press came freely and independently to the same view about the Iraq war. That is the kind of worry as regards consolidation and genuine press freedom.
	Clive Soley drafted the amendment. Unfortunately, because of the guillotine in another place it was not debated. He pointed out that the history of press regulation shows a pattern of press abuse, followed by threats of legislation, followed by a period of restraint before another period of abuse. He said that his recommendation is designed to provide a regular check on the effectiveness of press regulation: it is that Ofcom, as a regulator, can review and report periodically on the effectiveness of the self regulation of the press.
	That is what we suggest. I do not believe that it would be an onerous duty. In carrying forward the programme he has announced, it would give Christopher Meyer some guarantee that someone was still watching. As Pat Mitchell reminded us at a meeting, democracy and a free press share the same fate. It is important that within our country and our democracy we have a press that is respected by the public and provides the public with the kind of news and opinion they deserve.

Lord Wakeham: My Lords, the noble Lord suggested that he might be leading the Charge of the Light Brigade. Reading his new clause, I thought that it was a proposal to nationalise my old job. I think that I was probably better off out of it before that came about.
	As the House will know, I was chairman of the Press Complaints Commission for over seven years. It is not my objective today to defend every action of the PCC or to talk much about that. However, even the critics of the PCC recognise that over the past 10 years standards have improved substantially both in the press and the PCC. If the House wants a good example of that, the Select Committee in another place which reported recently—it was somewhat critical, wanting a privacy law and so on—stated that it believed that standards had improved in the press and the PCC. I recognise that there is a long way to go.

Lord Thomson of Monifieth: My Lords, does the noble Lord apply that individually to the News of the World?

Lord Wakeham: My Lords, I have long since passed the day when I seek to pass judgments of that kind. I was quoting from the judgments of others. The one thing I learned when I was at the PCC was not to give condemnations of anyone without hearing the arguments on both sides. Of course, every newspaper I had to deal with had occasional lapses in standards. If there were no lapses in standards, there would be no need for a PCC. I believe that for the past 10 years standards have improved and I see no reason why they should not continue to improve. Indeed, I had to deal with a number of attempts, akin to this amendment, to deal with such issues and I always welcomed them. I took the view that they were welcome opportunities so long as people did not inhale too deeply what was being said. They were helpful to the PCC because they enabled it to show the industry that there was concern about standards and it could use that publicity as a means of trying to raise standards. I certainly did that on a number of occasions during my time as chairman.
	Nevertheless, my judgment remains that this proposal has many more negatives than pluses. I shall try to explain why. I draw a clear distinction, as I believe the Government do in the Bill, between the kind of regulations that one needs for radio and television—a licensing system—because of the limited spectrum, although I wonder for how much longer, in the years to come, it will be possible to maintain that distinction. At the moment, that is the position and the Bill seeks to regulate it.
	On the other hand, newspapers do not need licences; they are part of a free society. On one occasion, when Home Secretary, Jack Straw referred to the freedom of the press as a manifestation of the freedom of expression under the Human Rights Act. I disagree fundamentally with the noble Lord, Lord McNally. I do not believe that there is, in practice, a half-way house. Either the press is free or it is statutorily controlled. Co-regulation and accredited self-regulation are another way of controlling the press through the law. A body such as Ofcom, which, in effect, is run and financed by the state, ultimately would have to decide whether a newspaper was responsible when that newspaper might well be judging the position of people in power. Ofcom could hold that the newspaper was irresponsible. I do not believe that Ofcom should be put in that position. In my view, that is not compatible with a free press.
	That is at the heart of the matter. Let us assume that it happens. What does Ofcom do about it? When it judges that the press or the PCC are irresponsible, does it intervene? Does it ask the Government to intervene? If not, it will find itself defending actions in the courts. If that happens that will be the end of a free press in this country.
	On a practical level, the PCC does its job by common-sense resolution of disputes. Not everyone is happy with the outcome of such resolutions, but to create a body to which the PCC is accredited is to create an appellate body to which disgruntled complainants will run with their grievances. At one fell swoop the system becomes legal and unwieldy. The true losers will be the vast majority of citizens of this country who currently receive good and speedy redress from the system of self-regulation.

Lord Avebury: My Lords, can the noble Lord tell me where in the amendment it says that a disgruntled complainant can go straight to Ofcom?

Lord Wakeham: My Lords, that is nowhere in the Bill. That is the point. If a complainant receives an unfavourable judgment from the Press Complaints Commission, and Ofcom, under this resolution, does not take steps to deal with that, in my view the person could go to court to seek to say that Ofcom was not carrying out the statutory responsibility that the noble Lord, Lord McNally, would like it to undertake. As a result, the complainant would seek damages and Ofcom would find itself in the courts every time someone was dissatisfied with an appeal. That is the danger that I see. Therefore, at one fell swoop the system would become legal and unwieldy. As I said, the true losers would be the majority of citizens who currently receive good and speedy redress from the system of self-regulation.
	At the moment the PCC works, not perfectly—I have never said that it does—but pretty well because of a financial and a moral commitment of the publishers to self-regulation. If the amendment, or something similar, is part of the law of the land, and the press was brought under the ambit of statutory control, would they continue to support the whole business? I fear not. So we may find that at one fell swoop—as regards the ordinary citizen, who does not have the odd £250 million necessary to take an action in the courts—we would go from an imperfect system of self-regulation, with all its shortcomings, to a system, in practice, of no regulation. That would be a very bad deal for the citizens of this country.

Baroness Buscombe: My Lords, I oppose the amendment tabled by the noble Lord, Lord McNally. It would confer a duty on Ofcom to provide for the enforcement of the Press Complaints Commission's code of practice. Noble Lords have already said today that last Monday the Culture, Media and Sport Select Committee published its report into privacy and media intrusion. The committee was charged with the task of assessing the effectiveness of the PCC and making recommendations as to its improvement. In proposing that the Government reconsider their current position on this issue, the committee recommended that they should undertake full and wide consultation prior to any legislative change. We do not believe that legislative intervention would provide a sensible or an adequate solution.
	My noble friend Lord Wakeham gave cogent reasons why the amendment would not work and why it should be resisted. It would be otiose to attempt to repeat those reasons. We do not suggest—nor did my noble friend to any extent—that the Press Complaints Commission is perfect, but we believe that self-regulation is the most effective mechanism through which our press can be scrutinised. We therefore welcome Sir Christopher Meyer's invitation to review the progress of the Press Complaints Commission in a year's time. The freedom of the press is a fundamental democratic right that should be safeguarded. We do not support legislative change in that area and, therefore, oppose the introduction of statutory control of the press through the back door.
	We want, of course, effective self-regulation. I believe that that is what we all want. The noble Lord, Lord McNally, made reference to the Advertising Standards Authority. I am minded to suggest that it would be helpful if the PCC took a leaf out of the self-regulatory book of the advertising industry and of the Advertising Standards Authority. Perhaps that is not a fair comparison; however, it is an irresistible suggestion because, as the noble Lord, Lord McNally, rightly said, the Advertising Standards Authority commands respect and confidence which must be what Sir Christopher Meyer seeks to achieve on behalf of the Press Complaints Commission. Let us give Sir Christopher a chance.

Lord Lipsey: I want to refer to the Advertising Standards Authority. I am a member of the council of that authority—nice things have been said about the authority for which I thank noble Lords—and I have worked most of my life in the newspaper industry which the amendment addresses.
	Why does the ASA work well, and why is it viewed as working well, yet the PCC seems to convince only itself that it is absolutely perfect? The noble Lord, Lord McNally, is right to point out that the kind of rhetoric used—I do not refer to the speech of the noble Lord, Lord Wakeham, but to what was said to the Select Committee—is out of all proportion to the reality. The press does not seem to be able to look at the situation rationally. I believe that that is due partly to the different cultural situations in the two organisations. By and large, in the advertising industry the Advertising Standards Authority's verdicts are accepted. Sometimes people do not like individual verdicts because with an adverse ASA ruling one cannot win an advertising award. It is an amazingly effective sanction, which the press might like to think about.
	My experience in the press is that although the top bods will pay plenty of lip service to the PCC, deep down among the practitioners at the coalface the PCC is seen not as something necessary to the press and to its furtherance but as an obstacle; as the enemy, something to be got around and ignored. On too many occasions it is ignored.
	There have been so many last chances for the press on the issue that one is reluctant to provide another. But the key if the press wishes to avoid the kind of regulation proposed in the amendment is that it must try to internalise the PCC code. Journalists must not be taught that this is an adventure playground in which anything goes and one gets away with whatever one can. They must not be allowed to treat ordinary human beings as though the human soul can be disregarded by journalists, and as though they are freed from the ethical constraints on the rest of us just because they are a free press.
	Of course I am in favour of a free press, as we all are. Having spent many years in the industry, I say in all seriousness that if that does not happen swiftly and Chris Meyer's initial work does not turn into something more concrete that the newspapers take on board, then if the McNally amendment does not succeed today, it will succeed in some Parliament coming soon. I would rather avoid that, but the press has its fate in its own hands.

Lord Puttnam: I strongly support and echo my noble friend Lord Lipsey, and to an extent the noble Baroness, Lady Buscombe. We owe a debt to the noble Lord, Lord McNally, for raising the issue, which needs a great deal more discussion and deserves to be raised at greater length in the House and more often, because it is at the core of civil society.
	I do not think that the media in this country have served civil society well in the past 10 years. The noble Lord, Lord McNally, was good enough to mention that my father was a journalist. My father retired and died deeply disappointed with what he regarded as a noble profession. Auberon Waugh once said that legitimate journalism was whatever one could get away with. I suspect that many people's interpretation of the PCC code is precisely that. My noble friend Lord Lipsey does us all a favour in saying that the profession must internalise its code of practice, not find ways of avoiding and evading it.
	I have one more point. I have listened many times to Alan Rusbridger—whom I admire greatly—talking about the development of a responsible press. One of the arguments he makes in favour of the press is how extraordinarily difficult it is to edit a daily, or indeed probably a Sunday newspaper. It is a confusing, complicated and rather chaotic business, and of course at times mistakes are made.
	I have total sympathy with that position, but having spent the past six years working within the machinery of government, I have to tell Mr Rusbridger and every other editor that if they think their lives are difficult, complicated and confused, they should try being the Secretary of State of a large department. It would be a good thing if editors could internalise, but the same type of error is possible within the machinery of government as every single day of the week occurs in the production of their daily newspapers.

Lord Thomson of Monifieth: I would like to say a brief word in support of my noble friend Lord McNally. He made a brave speech in the circumstances, as he may find out in due course when he gets the mud treatment from the press.
	In mid life I spent a number of years not as a professional working politician but as a professional regulator. I was chairman of the Advertising Standards Authority—a totally voluntary, self-regulatory non-statutory body—and then the regulator of commercial television with the Independent Broadcasting Authority. I have a few brief words of advice for the noble Lord, Lord Currie, whom we wish well in his new role, about the conclusions I drew from that episode in my life.
	I am grateful for the nice things that have been said about the way in which the Advertising Standards Authority has established its reputation. The reasons are simple: first, the advertising industry faced the threat of statutory regulation if it did not mend its ways some years ago. Secondly, the arrangements it made had some crucial elements for any form of effective self-regulation that the Press Complaints Commission could usefully study.
	First, it should have an automatic self-financing arrangement for its funds and should not need annually to go around the people it is to regulate with a begging bowl, which so often happens with such arrangements. The Advertising Standards Authority is funded by a mechanism, the Advertising Standards Board of Finance, which is automatic in terms of a levy on display advertising. Secondly, it must have effective sanctions. The Advertising Standards Authority does have effective sanctions that bite if necessary. Thirdly, it must have a board on which the lay element is the majority element. Those were the secrets of the Advertising Standards Authority's success.
	The Independent Broadcasting Authority was a statutory body because it had to be responsible to Parliament for the use of a scarce national resource: the spectrum. But as far as possible, the tradition of the Independent Broadcasting Authority, particularly on the advertising side but also on the regulating of standards, was as far as possible to be a self-regulatory arrangement with the statutory element a last resort.
	I am afraid I do not share the optimistic view of the noble Lord, Lord Wakeham, that there has been a dramatic improvement in press standards over the past decade. I am glad that the new chairman of the Press Complaints Commission is conducting a review of the way it operates. He would do well to look seriously at its internal arrangements; and some of the experience of the Advertising Standards Authority might be highly relevant in enabling it to avoid the deep distrust that now operates about the way it carries out its duties.
	There is a great dilemma in a free society about the press's responsibility to the nation. The poet Humbert Wolfe made a famous remark between the wars, which might be relevant today:
	"You cannot hope
	to bribe or twist,
	thank God! the
	British journalist.
	But, seeing what
	the man will do
	unbribed, there's
	no occasion to".

Lord Brooke of Sutton Mandeville: My Lords, the noble Lord, Lord McNally, spoke of the events of 10 years ago. In conjunction with my noble friend Lord Wakeham I had a small walk-on part in those days. I listened to my noble friend's description of the course of events since those days and his conclusions, and I concur with both. The noble Lord, Lord McNally, made comment on the comparative number of times Mr Murdoch has visited No. 10. It might have been regarded as the sub-text of his entire speech.
	No. 10's instincts for hospitality are a matter for No. 10. I will only remark that Attlee, who was so dismissive of the media that he could be persuaded by his press secretary Francis Williams to put a newstape machine into No. 10 only on the grounds that he would have up-to-date news of the cricket scores, has himself had a good press down the years from historians. Those facts may not be disconnected.

Lord Dubs: My Lords, I am chairman of the Broadcasting Standards Commission. We also have a function not that different from the PCC in relation to broadcasting. That is the work we do when we receive complaints about breaches of privacy or unfairness in television programmes. We are occasionally compared in our methods and approach to the PCC. I do not want to develop that argument too far, but it is good that the issue is back on the agenda. If I were the chairman of the PCC I would look hard at how the Advertising Standards Authority and the Broadcasting Standards Commission work to see whether any lessons might be learned. Both organisations are judged to do their job not too badly—although I speak as the chair of one of them—in relation to the PCC, which is subject to much criticism despite the robust defence of it by the noble Lord, Lord Wakeham.
	The PCC could look at other models. If it moved a little, that might take the heat out of the argument for statutory regulation of the press, which none of us wants. If the PCC can meet the public need voluntarily, through self-regulation, nobody would want statutory regulation, because it involves all sorts of problems.

Baroness Howe of Idlicote: My Lords, I commend the noble Lord, Lord McNally, for introducing the subject. It has been below the surface for some time and there has been general concern about it. Six or seven years ago, while at the Broadcasting Standards Commission, I went to a conference organised entirely by the press. The concern expressed there by members of the press about the rapidly falling standards of their profession was extremely worrying.
	One should also be grateful to the noble Lord, Lord McNally, for spelling out in his amendment the strength of the additional powers that the new regulator, Ofcom, would have if there were breaches—not least the power to impose considerable fines.
	Nevertheless, I join the noble Lords, Lord Puttnam and Lord Lipsey, in their approach. We have a new chairman, Chris Meyer, who is extremely able. The Press Complaints Commission has always had extremely able chairmen adapting to the times. At this stage, I would rather give the new chairman some time. He might well be making recommendations about the sort of changes debated, the codes for the advertising industry and so on. I congratulate the noble Lord, Lord McNally, for raising the issue.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord McNally, was bold enough to align himself with those who took part in the Charge of the Light Brigade. I must remind him that they were,
	"Storm'd at by shot and shell".
	because they rode up the wrong valley. I think that that is what happened today.
	The noble Lord, Lord McNally, will in no way be surprised to learn that the Government believe that maintaining the freedom of the press and effective self-regulation is preferable to any form of statutory control. I shall discuss the effect of the amendment shortly. We cannot support the idea of giving Ofcom powers over the newspaper industry's code of practice, which is overseen by the Press Complaints Commission. That would destroy the principle of press regulation and is an unnecessary means of ensuring compliance with the industry's own principles of behaviour.
	There has been a lot of talk about the Culture, Media and Sport Select Committee last week. But I remind the House that the Select Committee's report was about privacy and media intrusion, not specifically press intrusion. On reading the report in detail, I find that not only did the Select Committee not follow the path proposed by the noble Lord, Lord McNally, even for the media, but its recommendations on Ofcom's involvement were almost entirely on broadcasting. The only occasion when they suggested a relationship between Ofcom and the print media was in respect of a media scrum. In a media scrum it is very difficult to distinguish between broadcast journalists and press journalists, so there is some excuse for that relationship. That is why I think that the noble Lord, Lord McNally, quoted from the evidence to the Select Committee rather than its conclusions. It is easier to find evidence that you agree with than it is to find conclusions of the report that you agree with.
	We have listened carefully to noble Lords, particularly the noble Lord, Lord Wakeham, who talked about changes in the past few years. I am afraid that the noble Lord, Lord Wakeham, was described as complacent. All of us would agree—and he did, too—that there is still a long way to go in achieving the standards in print media that many wish to see. But I pray in aid of the Press Complaints Commission the issue of witness payments, which was raised in the House recently. In March this year the Press Complaints Commission strengthened its code on witness payments. There is evidence that, perhaps for only a short time, the situation may be improving.
	I shall now discuss the wording of the amendment. The noble Lord, Lord McNally, seeks to convince the House that we should examine a report on the effectiveness of press regulation rather than introduce press regulation in the amendment. The amendment does more than that, as the noble Lord, Lord Wakeham, indicated. Parliament considers the effectiveness of press regulation, as the Culture, Media and Sport Select Committee has done, but it has not recommended a role for Ofcom in press regulation, and we agree with that.
	Under the terms of the amendment, the industry's code would remain voluntary. The vast majority of newspapers sign up to the code of practice. Only a tiny percentage of small, independent publications have chosen to opt out. But the amendment provides that Ofcom would be required to enforce the code and have power to impose fines of up to £500,000. How does that square with a voluntary code? If a government-inspired organisation such as Ofcom starts to impose fines, surely the immediate reaction of the worst end of the press will be to opt out of the Press Complaints Commission. Where would Ofcom be then? I cannot think why an editor would voluntarily sign up to a code that meant to epitomise self-regulation if it were to be enforced by Ofcom, a state regulator.
	There are many issues about the transparency of the code's operation. People fail to recognise how the Press Complaints Commission seeks to make the terms of the code more available. I welcome this debate and am grateful to the noble Lord, Lord McNally, for raising the issue. We should learn from the debate that the Press Complaints Commission is under a constant obligation to itself and the people of this country to improve the code and its enforcement. I agree very much with what the noble Lord, Lord Lipsey, said about that. I agree with the noble Lords, Lord Lipsey, Lord Dubs and Lord Puttnam, that there are lessons to be learned. I believe that Sir Christopher Meyer is learning those lessons. I think that he will learn from the debate today. Although I am grateful for the speeches made, I do not believe that the House should accept the amendment.

Lord McNally: My Lords, as I explained, the amendment is identical to that tabled by Clive Soley in the Commons, which could not be debated because of the guillotine. I half expected that the Minister might accept the amendment so that it could return to the Commons and Clive Soley could have his debate. Overcoming that disappointment, I was very pleased by the summing-up of the noble Lord, Lord McIntosh. All too often, I fear, Ministers have sounded like the school sneak rushing to the proprietors saying, "Look, aren't we good boys? We are against statutory regulation". The balance should involve to a much greater extent Ministers telling the press to clean up its act.
	I shall comment briefly on the gypsy warning that I received from the noble Lord, Lord Thomson. I can tell him that I have cancelled my subscription to Asian Babes and to my local massage parlour. I now live a life of such monogamous heterosexuality that I would qualify to be a C of E bishop. The Sun will search my dustbin in vain. The explanation could also be advancing age.
	I am pleased with the tone and the contributions today. I wish to thank the noble Lord, Lord Lipsey, a practising journalist, in particular. There is a need for the cultural change for which he called, and for the press to establish its own ethical standards. I welcome the comments made by Sir Christopher Meyer to the Culture, Media and Sport Select Committee. He said: "Come back in a year's time and see what progress we've made". That is a good idea. Since I started with the Charge of the Light Brigade, let me finish with the Terminator—"we'll be back". I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 62 [Obligations to be secured by universal service conditions]:
	[Amendment No. 53 not moved.]
	Clause 65 [Tariffs etc. for universal services]:

Lord Evans of Temple Guiting: moved Amendment No. 54:
	Page 66, line 40, leave out from "that" to end of line 9 on page 67 and insert "the terms on which a person is provided with anything required by the universal service order do not require him—
	(a) to pay for an unnecessary additional service; or
	(b) to pay, in respect of anything required by the order, any amount that is attributable to the provision to him of such a service.
	( ) The references in subsection (3), in relation to a person, to an unnecessary additional service are references to anything the provision of which—
	(a) he has to accept by reason of his being provided, at his request, with something required by the order ("the requested service"); and
	(b) is not necessary for the purpose of providing him with the requested service."

Lord Evans of Temple Guiting: My Lords, in moving Amendment No. 54, I shall also speak to Amendment No. 55. Concerns were raised that the wording of Clause 65, dealing with tariffs for universal services, might permit more intrusive regulation than is desirable. The possibility of "gold-plating" was referred to. We indicated in Committee that we were sympathetic to those concerns and are accordingly putting forward these amendments to address them.
	The provisions of the directive which this clause transposes—I refer to Article 10.1 of the Universal Service Directive—are concerned with ensuring that a subscriber wishing to be provided with any of the universal services specified by the directive shall not be required to pay for facilities or services which are not necessary or not required for the service requested.
	The amendments address directly the question of the bundling of unnecessary services or facilities with the services requested. I believe that they effectively meet the concerns that have been raised, while continuing to provide a full implementation of the intention of the directive. I beg to move.

Baroness Buscombe: My Lords, we welcome the government amendments to this clause, which reflect amendments tabled in Committee by the noble Lord, Lord Avebury, to which my noble friend Baroness Wilcox and I added our names. The Bill, as previously drafted, incorrectly interpreted Article 10.1 of the Universal Service Directive. Therefore, we are grateful that the Government have reconsidered the proposed provision and amended it accordingly.

Lord Avebury: My Lords, we are also grateful to the Minister for doing that which was promised by his noble friend Lord McIntosh in answer to Amendment No. 102 in our names in Committee—and to see that when somebody receives anything that has to be provided under the Universal Service Directive, he is not required to pay for anything else, or to pay for anything beyond that which is strictly necessary for the provision of that service. This is a useful amendment, and we are grateful to the Government for inserting it.

On Question, amendment agreed to.

Lord Evans of Temple Guiting: moved Amendment No. 55:
	Page 67, line 15, at end insert—
	"( ) References in this section to providing a person with anything include references to making it available or supplying it to him."
	On Question, amendment agreed to.

Lord Avebury: moved Amendment No. 55A:
	Before Clause 91, insert the following new clause—
	"INVESTIGATION OF CONTRAVENTION OF CONDITION
	(1) Where OFCOM determine that there are reasonable grounds for believing that a person may be contravening, or may have contravened, a condition set under section 42, they may undertake an investigation.
	(2) Where OFCOM decide to undertake an investigation under subsection (1), they shall give the person concerned a notice in writing which—
	(a) indicates the reasons for the investigation being conducted by OFCOM;
	(b) specifies in sufficient detail the condition and alleged contravention in respect of which the investigation is being undertaken; and
	(c) specifies the period during which the person has an opportunity to make representations about the matter.
	(3) Subject to section 95(3), the period specified under subsection (2)(c) must be a period of at least one month beginning with the day on which the notice is given."

Lord Avebury: My Lords, in moving Amendment No. 55A, I shall also speak to Amendments Nos. 56 to 64. We believe that these amendments are necessary to put in place a proper three-stage process leading up to the imposition of fines on communications providers for breaches of the general and other conditions of entitlement.
	If Ofcom believes that a provider is committing a breach, the proper course of action is, first, to investigate whether this is the case; secondly, to make a decision as a result of the investigation; and, thirdly, to take enforcement action—including, where appropriate, the imposition of a fine. The clause assumes that if any provider is committing a breach, he has done so knowingly, and therefore as soon as Ofcom becomes aware of this breach it only has to issue the determination and to impose whatever penalties it chooses. But there is a three-stage process in general competition law, and it is not necessarily the case that sector regulation is easier to understand. Noble Lords who have had to read this Bill will agree that the general, significant market power and access-related conditions may cause difficulties of interpretation to the wide range of new communications providers that now fall within the remit of Ofcom.
	Even under the existing regime, experience has shown that many alleged breaches of conditions turn out, on investigation, not to be breaches after all. It is unreasonable to expect providers to start remedying alleged breaches before it has been established by Ofcom that such a breach has occurred. In Committee, the Minister suggested, on 20th May, at col. 707, that attempting to replace a two- stage process with a three-stage process, as we propose, would actually result in a six-stage process. That is a misleading caricature of the amendment, because two of the stages that the Minister invented were of the serving of notices. That is an operation requiring no longer than the time it takes to draft the notices, and the Minister manages to insert a further stage by treating the process of formal investigation and the opportunity for representation as consecutive rather than concurrent, as they would be.
	We do not accept that a three stage process need take much longer, or that it has had the dire results attributed to it under the existing regime, let alone under general competition law. There are rules and procedures for investigating breaches of the Competition Act 1998, drawn up by the Office of Fair Trading, known as the directors' rules. We see no reason why that should not read across into the Bill, and, to put it the other way round, we do see problems arising if there is a radical difference between the two regimes of this Bill and of the Competition Act.
	Even more fundamentally, we say that there is a serious misinterpretation of Article 10 of the Authorisation Directive, dealing with compliance. Article 10.2 deals with the situation where a national regulatory authority "finds" that an undertaking does not comply with the conditions, while in the Bill that word is transmuted into "determine that there are reasonable grounds for believing". Secondly, the subject of this determination has to take what the Minister calls "remedial action", which may include the payment of substantial sums of money, at the same time as that person is making representations against the "determination", or he risks the payment of a substantial fine if Ofcom's belief turns out to be true. The undertaking has to accept that a breach has been committed and do whatever Ofcom may require to remedy it while at the same time arguing that Ofcom misdirected itself in making the original determination. That is a profoundly unsatisfactory and unfair process. It cannot have been the intention of the directive, because it defies natural law. Can the Minister name any other country in Europe which is using the term "finds" in Article 10.2 to mean a decision taken out of the blue, placing an undertaking under the obligation to take costly action within a month to remedy alleged breaches of the conditions which it denies.
	The Minister said, in our debate on 20th May:
	"It would be in breach of a person's right to a fair hearing and against natural justice to make a conclusive determination before allowing a person to make representations".—[Official Report, 20/5/03; col. 707.]
	But that is exactly what the Bill does.
	Ofcom determines that there are reasonable grounds for believing that a contravention has occurred. Secondly, it issues a notification. Thirdly, the undertaking makes representations, but at the same time complies with the notified conditions and remedies the consequences of the breaches. Fourthly, if at the end of a month from the date of the notice, the undertaking has not fully complied with the notice, Ofcom may issue an enforcement notification. Fifthly, Ofcom may take civil proceedings if the undertaking still fails to comply. The Government's process has five stages, as compared to the three in ours. Only at the fifth stage could the undertaking get a fair hearing if it has rejected the initial notice as unreasonable.
	The Minister's argument, and the procedure for dealing with breaches in the Bill, fail to recognise that there will be situations, as there are now, where an issue is not clear cut, because the regulator has to judge whether something is "unfair", or because there has to be interpretation of an obligation. There are going to be cases where, after proper consideration of the representations made, Ofcom will reverse its original belief and decide that no breach has occurred. That surely the Government must acknowledge; if Ofcom were infallible, there would be no point in allowing representations. But where the company is exonerated after consideration, it will have incurred financial, competitive and goodwill losses, for which it has no remedy. Nor is there any penalty against the competitor whose complaint is not upheld after more thorough investigation. That will inevitably encourage the use of complaints by firms that come under legitimate competitive pressure.
	We are not trying to make the enforcement of conditions unnecessarily bureaucratic or cumbersome, and we recognise that there may be cases where there is a serious risk to public health, public safety or national security, or where serious operational or economic problems may be caused to another provider or user, so we accept the urgency procedures of Clause 95. The Minister says these are "extremely limited", but we believe that they fully meet the danger of,
	"substantial and possibly irreversible adverse consequences".—[Official Report, 20/5/03; col. 706.]
	which the Minister ascribed to a genuine investigation of prima facie breaches of the conditions. I beg to move.

Baroness Buscombe: My Lords, we support the amendments.

Lord McIntosh of Haringey: My Lords, these are identical to the amendments tabled in Committee, and I am sorry that the noble Lord, Lord Avebury, did not like my response then. I shall try again.
	In the noble Lord's closing remarks on the amendments in Committee, he raised a point of semantics as central to his position. He suggested that the use of the word "finds" in Article 10 of the Authorisation Directive meant that there had to be an investigation by Ofcom before it could justifiably take enforcement action. He said:
	"One does not find something to be true out of thin air"—
	or, as he now says, "out of the blue". He continued:
	"Evidence must be produced. In particular, if one is examining a case that involves substantial penalties, one must allow the person who is being accused the opportunity of rebutting the allegations".—[Official Report, 20/5/03; col. 708.]
	I take it that the thrust of his argument is the same now.
	I quoted the noble Lord in full, because he put my own point very well. I quite agree that Ofcom should not be able to impose a penalty or require remedial action without first producing evidence of the contravention and allowing an opportunity for representations. But that is exactly what Clause 91 already requires. Enforcement action can be commenced in accordance with Clause 91 only where Ofcom has reasonable grounds for believing that a person is contravening or has contravened a condition. In many instances—probably the majority—prior investigation of the matter in issue will be necessary before Ofcom will be able to decide whether or not it has such "reasonable grounds".
	The amendments would have the effect of mandating a formal investigation after Ofcom has already determined that it has reasonable grounds for believing that a breach has or is occurring. Thus on this basis it is very possible that Ofcom would have to carry out two investigations, one in order to determine whether it has grounds to carry out an investigation under Clause 91, and one under Clause 91 itself. We do not need, and should not have, statutory provision requiring Ofcom to carry out an investigation in order to determine whether it has reasonable grounds to believe that a contravention is occurring or has occurred, as these amendments would provide.
	Ofcom will have the necessary investigatory powers, notably through the collection of information in accordance with Clause 132. Where it uses them, it must do so in accordance with the procedures in Clauses 134 and 135. However, in some cases, sufficient evidence may be presented at first instance—for example, in documents supplied by a complainant—or may have been obtained informally. To require a preliminary investigation in those circumstances, before a notification of contravention could be issued, would only add bureaucratic delay. Nor is there any question of the subject of Ofcom's enforcement actions not being informed of the case against them and the evidence for it. The notification to be given under Clause 91 must set out the basis for the making of Ofcom's determination, and the subject of action must be allowed a period—normally, a month, as required by the directives—in which to make representations to Ofcom on it and to take any corrective or remedial action that may be necessary, if it so wishes.
	Only at the end of that period will Ofcom have power to make a final determination on whether or not there has been a contravention and, if appropriate, impose penalties or other remedies. If the subject of notification takes appropriate remedial action within the period, whether or not he also makes representations against the notification, Ofcom cannot impose any financial penalty or take any other enforcement action against them, even if they subsequently find there to have been a breach. The failsafe is in the opposite direction from that claimed by the noble Lord, Lord Avebury. Of course, in addition there is a full right of appeal to the tribunal on the merits, so there is no question of prejudice to the rights of the subject of the enforcement action under Clause 91.
	I also take issue with the noble Lord on his claim, which he made last time and repeated today, that taking action on the basis of reasonable belief is contrary to the directive. Article 10 of the Authorisation Directive requires that, where the regulator finds that there is a breach, it shall notify the operators of that finding and give them a reasonable opportunity to state their views and remedy any breaches within a specified period. If they do not do so, the regulator is then required to take measures to ensure compliance, including imposing financial penalties where appropriate. In our view, it would be in breach of a person's right to a fair hearing and against natural justice to make a conclusive determination before allowing a person to make representations. As the directive requires representations to be capable of being made and remedial action to be taken following the finding, we believe that it is legitimate to interpret the reference to "find" in this context as meaning that there are reasonable grounds for believing that a contravention has occurred or is occurring.
	I remind noble Lords that, under the present system, in some cases, by the time effective enforcement action could be taken, those affected by the breach could already have suffered substantial, and possibly irreversible, adverse consequences. The new provisions streamline the enforcement process. But, in order to conform with the directives, normally at least a month has to elapse between Ofcom issuing a contravention notice and the issue being finally decided, before any remedial action can be taken.
	The noble Lord also suggested that the provisions of Clause 95 were sufficient to allow Ofcom to deal urgently with cases where a breach of condition by an operator was causing substantial and possibly irreversible damage. He suggested that my argument that the clause was too narrow was not a strong one. However, the clause allows, among other things, for the normal period of a month for representations to be waived. Consequently, the test for applying the Clause 95 powers is very strict, as it should be. To use them, Ofcom must have reasonable grounds for suspecting that the alleged breach in question creates an immediate risk of a serious threat to public health, safety or security, or serious economic or operational problems for other users or suppliers. So it would not be possible to use these powers in more routine cases.
	Nevertheless, some of those cases could involve potentially significant, and possibly irreversible, detriments to the profitability and competitiveness of other operators and/or to consumers, even though they might not be so serious as to drive the victim out of business. In that the noble Lord, Lord Avebury, is right; Clause 95 could be used in those circumstances.
	Clause 91 provides for procedures that are robust enough to minimise the risk of such difficulties and to limit delay, while giving those subject to them sufficient opportunity to defend themselves and avoid penalties.
	Amendment No. 64 seeks to replace the provisions of subsections (4) to (11) of the clause with a general power for Ofcom to make procedural rules by statutory instrument. Presumably the aim here is to provide more opportunity for discussion and debate on the detailed enforcement processes and to limit Ofcom's discretion to make and amend its own administrative procedures. We do not consider that such a change would be either necessary or desirable. There has already been considerable opportunity for interested parties to comment and make suggestions in the area and we have considered the points made to us.
	Ofcom needs to be allowed a certain amount of discretion and flexibility in regard to its administration of the various powers and duties which Parliament will be giving it in order to be able to respond quickly to new developments and as its experience of operating the new system increases. It will be under various obligations to ensure that its processes and the means by which those are drawn up are fair and transparent. The obligations are set out in Clauses 3, 6, 142 and 385. It is unnecessary to add to them in this way.
	I wish to make a final point about the word "finds". The noble Lord, Lord Avebury, asked me whether any other country in Europe is interpreting the word "finds" as a decision out of the blue. This is not a question of Ofcom making a decision out of the blue; it must make a determination that it has reasonable grounds to believe that there is a contravention of a condition. That is the theme that I would like the noble Lord, Lord Avebury, to take back to British Telecom as a result of our debate today.

Lord Avebury: My Lords, obviously we shall discuss the Minister's careful and thorough reply with those who have advised us on these amendments, but at first sight I must say that I am wholly dissatisfied with what he has said. First, the noble Lord has not shown that there is anywhere else in Europe where the term "finds" is being used in the way envisaged in this Bill. The word suggests a process that does not require any previous investigation, which in the normal English use of the term "finds"—as in "the court finds"—means that some process of investigation has been undertaken and that that process has led to the conclusion being reached.
	Furthermore, the noble Lord did not address the argument that I presented about the consequences for the person who has to take remedial action so as to avoid the possibility of a fine. The undertaking may consider that it has a very good response to the allegation. It then puts in its representations, but to avoid the possibility that the regulator may impose a fine amounting to as much as 10 per cent of turnover at the conclusion of the one-month delay, the undertaking is forced to take this remedial action which may, as I have said, be extremely costly and against which, if the regulator finds that it is not guilty of the breach as was first claimed, the undertaking has no remedy whatsoever. The operator will have paid over money, it will have taken steps which may have damaged its market position, but at the end of one month, if the regulator finds that it has not been guilty of a breach of a condition, it has no remedy whatsoever.
	However, in light of the fairly thorough argument put to us by the noble Lord, we shall now take the matter back to those who advise us and consider whether we must return to the matter at Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 91 [Notification of contravention of conditions]:
	[Amendments Nos. 56 to 64 not moved.]

Lord Evans of Temple Guiting: My Lords, this may be a convenient moment to move that further consideration on Report be adjourned until after Starred Questions.

Moved accordingly, and, on Question, Motion agreed to.

Lord Evans of Temple Guiting: My Lords, I beg to move that the House do now adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.
	[The Sitting was suspended from 1.35 to 2 p.m. for Judicial Business and to 3 p.m. for Public Business.]

The Lord Chancellor: Leave of Absence

Lord Falconer of Thoroton: My Lords, may I take the opportunity to inform the House that I will be undertaking a ministerial visit to the Isle of Man on Monday 7th July? I will also be attending an all-day Cabinet meeting on Thursday 10th July. Accordingly, I trust the House will grant me leave of absence on both these occasions.

United States: Extradition Treaty

Lord Goodhart: asked Her Majesty's Government:
	Why they have agreed to an extradition treaty with the United States which, on a non-reciprocal basis, authorises extradition of a person to the United States without the need to produce supporting information which would provide a reasonable basis to believe that the person committed the offence for which extradition is requested.

Baroness Scotland of Asthal: My Lords, US extradition law does not allow the United States to abolish the prima facie evidential requirement. We are not in the same position. We see no reason why a lack of reciprocity should prevent us from removing the prima facie evidential requirement for incoming requests when it is to our mutual advantage to do so.

Lord Goodhart: My Lords, do the Government understand that there is very great concern about abolishing the prima facie evidence rule except on a fully reciprocal basis? Do the Government understand that there is also great concern about abolishing that requirement at all in relation to the USA given the unacceptably low standards of criminal justice in some states such as Texas?

Baroness Scotland of Asthal: My Lords, I hear what the noble Lord says, but it is right that we recognise that the United States of America is still one of the greatest democracies in the world. We currently do not require prima facie evidence in countries such as Turkey, Azerbaijan and Albania, or, indeed, any of the signatories to the European Convention on Extradition, of whom there are more than 40. That has not given rise to any problems. That being so, we see no reason why we should impose a more stringent requirement on an established democracy such as the United States.

Baroness Williams of Crosby: My Lords, does the Minister agree that all the countries that she mentioned are governed by the broad principles of European Union conventions and those of the Council of Europe? Can she comment on whether, given the significance of the extradition treaty which raises serious issues, the case is not strengthened for this House to have a Select Committee on treaties in line with the position of the United States Senate which has the right to advise and consent on treaty issues? Does the Minister recall that Members of this House as distinguished as the noble Lords, Lord Alexander and Lord Wakeham, and, indeed, other senior Members of this House, have on occasion over the years pleaded for a Select Committee? Would she herself support such an initiative?

Baroness Scotland of Asthal: My Lords, it is always open to the House to decide whether it is appropriate to have a Select Committee. The noble Baroness rightly identifies many of the very distinguished Members of this House. Indeed, not one Member sits on these Benches without sharing that distinction. Both Houses of Parliament will have an opportunity to scrutinise the treaty in due course as the matter will come before the House. At the moment that appears to be the most appropriate way of dealing with the matter. If there are other matters that the House wishes to consider in due course, that is something for the future.

Viscount Bledisloe: My Lords, the noble Baroness said that she did not see why we should insist on reciprocity when that was to our mutual advantage. Can she explain to the House why it is to our mutual advantage to concede this measure to the Americans when they have not conceded it to us? Surely by conceding it to them unilaterally we remove any power or pressure we have to persuade them to modify their law if we give it up empty-handed?

Baroness Scotland of Asthal: My Lords, we have negotiated a very good treaty with our American partners without there being a need to impose the reciprocal arrangements. We have been able to do that—it is advantageous to us—because they are the major partners with whom we operate and have operated historically. The provision that we have established with our American partners is better than the provisions that currently operate between the EU generally and the Americans. That is advantageous to this country.

Baroness Turner of Camden: My Lords, is my noble friend aware that a number of Members of your Lordships' House have been, and still are, engaged in the discussion of the Extradition Bill related to the European Union? We are endeavouring to ensure through a series of amendments that human rights are adequately protected. Will we have a similar opportunity in relation to the extradition treaty with the United States?

Baroness Scotland of Asthal: My Lords, as I have already said, both Houses will have an opportunity to debate the matter when it comes before them. We shall have an opportunity to consider the specific provision.

Lord Elton: My Lords, in the light of the comments of the noble Viscount, Lord Bledisloe, the noble Baroness said that we had gained significant advantages by ceding this particular concession. Can she say what they are?

Baroness Scotland of Asthal: My Lords, it relates to the way in which the returns will take place. Your Lordships will know, as I say, that the USA is the UK's largest single extradition partner. In 2002, we surrendered 12 people to the United States and have had three returned from there. Noble Lords will know that in the past this has been a difficult, complex and long drawn out procedure. The new procedure that we have in place will enable us to have exchanges with the United States far quicker than we would otherwise have done. That is a real advantage to us.

Baroness Whitaker: My Lords—

Lord Lester of Herne Hill: My Lords, is the Minister aware that the Select Committee of the European Union's subcommittee, of which I am a member, has expressed great concern about the EU/US extradition arrangements in terms of human rights and civil liberties? Can the Minister explain why the bilateral treaty with the United States has far fewer safeguards of human rights, except in relation to the death penalty, than even the EU/US treaty which at least protects the constitutional principles of European states in relation to extradition to the United States for what is an offence punishable only by one year's imprisonment?

Baroness Scotland of Asthal: My Lords, we do not accept that the current bilateral treaty with the United States is less advantageous than the EU—

Lord Lester of Herne Hill: My Lords, that was not my question. I refer to the treaty that we are now debating— the future treaty that has not yet been ratified, not the existing treaty. Why does that not contain at least the same safeguards as the EU treaty?

Baroness Scotland of Asthal: My Lords, first, of course—the noble Lord will know this very well—we are still a member of the EU and therefore have the benefit of that treaty. In addition, we have the benefit of the bilateral treaty. We argue that the bilateral treaty that we have now engaged in will bring additional benefits over and above that which the EU has signed.

Baroness Whitaker: My Lords—

Lord Stoddart of Swindon: My Lords, does the noble Baroness agree that while the United States may be one of the greatest democracies in the world, some of the methods it uses in relation to people in prison, particularly in Guantanamo Bay in Cuba, cause many of us a great deal of worry? Can she say how this treaty will be discussed within the House of Commons and this House? Will it be on the basis of an Order in Council or will we need primary legislation?

Baroness Scotland of Asthal: My Lords, it will be an Order in Council.

Victims of Torture

Lord Hylton: asked Her Majesty's Government:
	Whether they will increase their contribution to the United Nations Voluntary Fund for the Victims of Torture and ask the European Union and the United States to do the same.

Baroness Symons of Vernham Dean: My Lords, tackling the scourge of torture is a priority for the Government reflected in the anti-torture initiative we began in 1998. Our funding of projects and organisations varies from year to year. We support the UN Voluntary Fund for the Victims of Torture although we decreased our funding last year while increasing funding on human rights projects overall by £1 million. Decisions on next year's funding are under consideration.

Lord Hylton: My Lords, I thank the noble Baroness for her reply. Is she aware—I expect that she is—that torture has recently been used in some 60 countries, with the result that about half a million torture victims are living in the United States of America? The United States Government are keen to increase funds for rehabilitation.
	The noble Baroness is very persuasive. Can she convince the European Union to restore its cut of 7.5 million dollars, which has left 30 medical centres without support in places where they are often the only source of help?

Baroness Symons of Vernham Dean: My Lords, I am aware that torture is a terrible scourge. It is important not only to support the victims of torture, but to try to deal with the whole problem by preventing torture from happening in the first place. The European Union does not fund the UN Voluntary Fund for Victims of Torture. Instead, it funds individual rehabilitation centres, both inside and outside the EU, through the European Initiative for Democracy and Human Rights. The United Kingdom pays 17 per cent of the funding for that European initiative. Much of its efforts are directed not only to victims of torture, but to dealing with the problem before it can get a hold.

Lord Avebury: My Lords, is the Minister aware that a number of NGOs that provide direct assistance to the victims of torture all over the world recently wrote to the head of the human rights commission, Mr Sergio Vieira de Mello, opposing any suggestion that the fund be amalgamated with other trust funds under the control of the UN? Will she assure the House that the Government will uphold the political independence of the UN Voluntary Fund for the Victims of Torture, which has been its most valuable asset?

Baroness Symons of Vernham Dean: My Lords, the independence is enormously important, so I take the noble Lord's point, but I stress that there are a number of different ways to tackle the terrible problem. That is what I hoped that my initial Answer implied. After all, there is the OSCE's anti-torture programme, the African Commission on Human Rights, and also our own projects in the United Kingdom. Another way to tackle the problem is being undertaken today by my right honourable friend the Foreign Secretary. With the noble and learned Lord the Lord Chief Justice, he is launching a new handbook entitled Combating Torture.

Baroness Rawlings: My Lords, following the noble Baroness's very clear answer to the noble Lord, Lord Hylton, and given that some of the rehabilitation centres may have to close, what are the Government doing to replace them? Will victims of torture be left without support?

Baroness Symons of Vernham Dean: My Lords, I will look very carefully at the numbers of the centres that may close. I assure the noble Baroness that I take the point very seriously. There are number of different ways in which we are trying to tackle the problem. I absolutely agree with the implication of her point—that people should not be left high and dry—which is important. However, my central argument is that it is enormously important to tackle the causes of torture. I have been able to specify the booklet launched today, and I hope that noble Lords will also be pleased to know that today we are signing up to the optional protocol to the convention against torture. That is another very important step in developing our armoury.

Lord Elton: My Lords, the noble Baroness mentioned our own domestic programme. Does that refer to the Medical Foundation for the Care of Victims of Torture? If so, would she consider, either in her own department or elsewhere, extending some funding to that organisation, which does invaluable work and is very short of funds?

Baroness Symons of Vernham Dean: My Lords, I cannot tell the noble Lord whether our domestic programme comprehends that. I have details of six or seven projects that the department has told me are covered by the programme, but that project is not mentioned. I shall ask the department for further details and write to the noble Lord.

Sexually Transmitted Diseases

Baroness Gardner of Parkes: asked Her Majesty's Government:
	How they intend to deal with the increased demand for diagnosis and treatment of sexually transmitted diseases.

Lord Warner: My Lords, the Government's 2001 sexual health and HIV strategy contains a number of measures to improve access to diagnosis and treatment for sexually transmitted infections. We have already committed £47.5 million to support strategy implementation and will invest an additional £40 million over the next two years, including investment in genito-urinary medicine clinics to improve capacity and reduce waiting times. To improve the quality of services, we are developing recommended standards for the treatment of HIV and STIs.

Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply, but the situation is far from satisfactory. People wish to remain anonymous when they go to seek advice as to whether they are suffering from a sexually transmitted disease. For that reason, the drop-in clinics have proved good, because there is no priority funding from the PCTs for sexual clinics. At present, drop-in clinics are having to close their doors within half an hour of opening, because the demand is so great. People are being turned away. Those who wait often have to wait three to four hours. There is underfunding for trained consultants in the subject.
	Will the Minister either see that more drop-in clinics are funded specifically to deal with this enormous public health crisis, or consider supra-regional funding so that there could be a number of special centres?

Lord Warner: My Lords, we anticipate that by 2004 there will be an increase of around 35 trained specialists in genito-urinary medicine. That will make some contribution to the position on waiting times in those clinics. So far as concerns PCTs and the primary care sector, we are trying to shift the balance of power to emphasise much more local decision-making, with the majority of health resources being distributed to PCTs. The spending review settlement provides for a significant new investment for PCTs, and enables them to plan for the next three years. However, it is unrealistic to expect sexual health to be funded differently from other NHS programmes.

Lord Clement-Jones: My Lords, the recent report of the Select Committee on Health was a damning indictment of the Government's lack of priority towards sexual health policy. That is only evidenced by the delay in 2001 of the publication of the national strategy for sexual health, the delay in the introduction of accurate nation-wide chlamydia screening, and the delay in the national awareness campaign. When will the Government respond to what the Health Committee rightly called a crisis, by making the problem a much higher priority and adding much greater resources to it?

Lord Warner: My Lords, we have said that we welcome the report by the Select Committee on Health. However, it is worth bearing in mind, as I said in my Answer, that we laid out in 2001 a sexual health and HIV strategy. A 27-point action plan was published in 2002 that highlighted what developments would be made, and recommended standards for HIV treatment and care, treatment of STIs, psycho-sexual services and reproductive health services. The HIV standards will be published shortly, and work is under way on other areas.
	We do not accept that nothing is being done. The issue is difficult. We have a 10-year strategy, and a very effective campaign—the sex lottery campaign—is being worked on and launched at the moment, aiming to change sexual behaviour among younger people. The key to much of the success in the area is changing that behaviour.

Baroness Masham of Ilton: My Lords, is the Minister aware that on 6th February I asked whether a national service framework could be set up for sexually transmitted diseases and other infections? I hope that he will consider that. Will he tell the House why there is such an explosion of the conditions? Is he aware that syphilis rose 500 per cent within the year?

Lord Warner: My Lords, we must all be very worried about the rise in these conditions. That is why we have the strategy that do we have, and that is why we are engaged in the sex lottery campaign. Noble Lords may smile, but we are trying to engage in a serious issue with young people, who are in many cases the leading group in terms of the rise in these diseases. We have to engage with young people where they are, and with their value sets and their behaviour.
	The lifetime number of heterosexual partners is increasing—which is a major contribution in this regard. In the past year there has been an increase in concurrent partnerships. Although there has been an increase in consistent condom use, the benefits of greater condom use have been offset by the increase in the number of reported partners. We are also seeing some figures reflecting the fact that we are getting better and faster at diagnosing such infections, and are therefore able to produce a treatment response.

Baroness Gould of Potternewton: My Lords, first, I must declare an interest as the chair of the independent Advisory Group on Sexual Health and HIV, whose responsibility it is to try to ensure that the 27-point action plan referred to by my noble friend is carried out. Perhaps I may pursue a little further the question of resources. I appreciate the points that my noble friend made about the budget that the Government have already spent. But that would not even cover half the cost of rolling out a chlamydia campaign. I know that there will be a further 10 pilots, but it is important that the chlamydia campaign is rolled out throughout the country.
	What inducements will there be for PCTs, in order to make sure that they prioritise the question of sexual health and are given adequate resources to deal with it? My noble friend mentioned the sex lottery campaign. It is a good campaign—I do not want to take away from that—but there is the question of whether we need a much more hard-hitting national campaign in order to make sure that the young in particular understand the consequences of unprotected sex.

Lord Warner: My Lords, the department is rolling out a chlamydia screening programme. Ten areas, covering 30 PCTs and over 400 individual testing sites, are involved in the first phase of the programme. Expressions of interest will shortly be sought from a further 10 areas covering a similar number of primary care trusts. Apart from Sweden, England is the only European country currently introducing a nation-wide programme of this particular kind. An extra £8.5 million will be spent on chlamydia screening during 2004–05.

Lord Skelmersdale: My Lords, the real question the Government have to answer is why it has taken those in the department so long to turn their attention to this problem from yet more reorganisation of the health service and a seeming total concentration on waiting-lists. Is not the time well overdue to have a health promotion campaign stressing the need for abstinence in cohabitation and to use sex education in schools to point out the dangers as well as the joy of sex?

Lord Warner: My Lords, work is continuing on strengthening sex education in schools. I do not think the noble Lord can say that we have been sitting on our hands. The strategy was published over two years ago, in 2001. I have already given the House a lot of details of the kind of results that are being produced. All I would observe is that calls for abstinence come, critically at this time, from people of an older disposition rather than from those who are younger.

Baroness Sharples: My Lords, which age group is most affected by these diseases?

Lord Warner: My Lords, the age groups most affected are younger people, between the ages of 18 and 30—that is why we are concentrating the sex lottery campaign on that particular age group. Many of the infections, particularly among women, are found in younger women, under the age of 20.

Genetically Modified Crops

Baroness Byford: asked Her Majesty's Government:
	What research is being done into the effect which genetically modified crops might have on human health.

Lord Whitty: My Lords, the GM science review is currently examining the considerable research already available on the health impact of GM crops and is expected to report next month. On the food side, the Food Standards Agency spends about £2 million a year on research into GM food safety. Each individual GM crop and each individual GM food must be rigorously researched and tested, including for any potential toxicity or allergenicity, before approval can be given.

Baroness Byford: My Lords, the Minister will be aware that his former colleague, Michael Meacher, accused Tony Blair's spin doctors and Ministers of systematically ignoring and rubbishing the evidence that genetically modified crops could be a health hazard. He said that many of the health tests carried out were scientifically vacuous. If that is so, and if, as the Minister has indicated, the current research will not be available until next month, is it not ridiculous that the Government are going ahead with their GM consultation when the evidence on which we should be basing our decisions is not yet available to the general public?

Lord Whitty: My Lords, as I have explained to the House on several occasions, the GM consultation is covering a whole range of aspects relating to the use of genetic modification techniques. It is not related to any particular decision on commercialisation. Two other strands of that examination of the issue are the science review, to which I have referred, and the economic review. Both pieces of evidence will be available next month. The totality of the public consultation and those pieces of research will form part of the background for future decisions. So it all fits together. I refute completely the noble Baroness's interpretation of my former colleague's remarks. He was in fact pointing out that there are areas of research that need further consideration. That is indeed what the Food Standards Agency is engaged in.

Earl Ferrers: My Lords, will the noble Lord explain whether the Government's view on genetically modified crops is that they are all right until they are proved wrong, or that they are unacceptable until they are proved right?

Lord Whitty: My Lords, the Government's view is that the case for GM crops has yet to be proved and the case against GM crops has yet to be proved. That is why we require this information. That is why the science review is so important. That is why, on every individual application for an individual commercialisation of a GM product, we have laid down, both at British and at European level, rigorous tests of its safety and its effect on the environment. We have yet to take decisions on new individual applications.

Baroness Hayman: My Lords, does my noble friend agree that there is some danger in the kind of confusion that has been reflected in terms of the issues of food safety and human health and the desirability of commercial cultivation and environmental effects? Can he confirm that every novel food—including, but not exclusively, food based on GM crops—has undergone a rigorous safety assessment and been approved, and that the Food Standards Agency agrees with that? Does he further agree that it is important to look at health benefits in the round? Perhaps non-food crops, such as GM cotton, which are saving the lives of agricultural workers in China because of the reduced effects of pesticides, should also be considered.

Lord Whitty: My Lords, to take my noble friend's final point, that is why the debate has to be very rounded. We need to examine the economics in development situations as well as in the UK and European situations, and the benefits or otherwise of GM crops in the round. As regards the first part of her question, I think that there is some confusion between the growing of crops—which raises issues of potential environment problems, and therefore issues of regulation for the co-existence of GM crops and other crops—and the issue of food safety, which, as my noble friend indicates, is thoroughly researched before any permission for commercialisation is given.

Baroness Miller of Chilthorne Domer: My Lords, will the Minister accept that the implications for human health may not relate only to GM crops themselves? The herbicides used on such crops, because they are herbicide tolerant crops, are extremely strong and extremely toxic, and can end up in water courses. I believe that the United States Environmental Protection Agency is beginning to have severe doubts about the use of such herbicides. Do we really want such herbicides used to that degree in England?

Lord Whitty: My Lords, the method of production that includes the use of herbicides, and the relative use of herbicides on potential GM crops, will be part of the assessment of the environmental impact of giving approval to commercialised crops in this country. The noble Baroness is right that it is not just the crops themselves, but the total production effect.

Lord Dixon-Smith: My Lords, is it not a fact that the Government's approach to this general area is fairly complacent, to say the least? I say that simply on the back of the fact that these crops are now in fairly widespread use across many countries, without apparent harm so far.

Lord Whitty: My Lords, I am not sure that the first half and the second half of the noble Lord's question stand together well. I deny that the Government have shown any complacency. There is widespread concern about the impact of the crops; and there are widespread claims for the benefits of these crops. What we intend to do—and engage the public in—is carry out an assessment of the balance of those arguments, based on sound science. That is what we are involved in now.
	It is not an issue of complacency, nor is the fact that crops have been successfully cultivated in other countries necessarily a sufficient criterion for us taking that decision in Britain and Europe. Our decision will involve the public view and will meet the public's concerns, but will be based on sound science.

Business of the House: Recess Dates

Lord Grocott: My Lords, with permission, before the Statements I should like to say a few words about recess dates. Back on 6th May, I told the House that the date on which the Summer Recess would begin, subject to the progress of business, would be Thursday 17th July. Since then, progress has been slower than expected. Therefore, with regret, I must tell your Lordships that my target date for rising has had to be revised by one day. The usual channels currently envisage the House sitting on Friday 18th July, and rising for the recess on that date.
	I should add, as ever, that this is always subject to the progress of business. On 17th July, Starred Questions will be at 11 o'clock; the usual channels have discussed this. With regard to the September sitting, it remains our intention that the House will sit from Monday 8th September to Thursday 18th September. Finally, I can tell the House that, again subject to the progress of business between now and the Summer Recess, and during the September sitting, the spillover will start on Monday 6th October.
	I cannot rule out the possibility that we may need to come back before that date, but I can assure the House that all of us in the usual channels fervently hope that that will not be the case.

Lord Cope of Berkeley: My Lords, I am grateful to the noble Lord for making that statement. We have had great diligence in the usual channels in the last few days in arriving at the business. Like him, I regret and deplore the proposal that we need to sit on Friday 18th July, after a long succession of successive Friday sittings. The cause is the volume and complexity of the Government's legislative programme, which has been compounded by important additions to it, such as fluoride to the Water Bill.
	On the question of the recess, I regret that the noble Lord is proposing to sit from 6th October. I draw attention to the fact that contrary to what was published last summer, this means that we will be sitting during the Conservative Party conference. I suggest that, if this kind of thing should be necessary in future years, the other parties should take on some of the problems that this causes. We should therefore, in successive years in turn, sit during the Labour Party conference and the Liberal Democrat Party conference.

Noble Lords: Hear, hear!

Lord Cope of Berkeley: My Lords, I am glad to see that there is a wide measure of agreement to that suggestion on the Labour Benches. Finally, I say to noble Lord the Captain of the Gentlemen-at-Arms that the recess starting on 18th September is called, in some parts of this House, the conference recess. What does the Chief Whip call it?

Lord Roper: My Lords, I thank the noble Lord for that statement. A great deal of work has been done in the last few days to ensure that we do not stray into the following week, which I am sure would not have been popular in any part of the House. I am grateful to the Government for finding ways in which we have been able to avoid that.
	It would be convenient in the future if the Attendants' Office did not send out a note about recess mail arrangements until the dates for the recesses are finally known. This has caused a great deal of confusion in all parts of the House in the last few days. We must make sure that this does not occur in the future.
	I support what the noble Lord, Lord Cope of Berkeley, said about Friday sittings. We need to have a better strategy, looking at the parliamentary year as a whole, so that we can have a more even spread of Friday sittings through the year, rather than having bunching during this period.
	Finally, I heard what was said about the great regret on the Official Opposition Benches about the recall on 6th October. On these Benches, we are glad that time will be available for us to attend the Liberal Democrat conference, and we are not prepared to see any change in those arrangements in the future.

Lord Grocott: My Lords, I am grateful to my colleagues—conspirators—in the usual channels, for some of the comments that they have made. The noble Lord, Lord Cope of Berkeley, referred to the complexity of the Government's legislative programme. I want to put on record, for the benefit of the House, the size of this year's legislative programme compared to one or two other years.
	So far this year, 34 government Bills have been introduced. I can compare that to, for example, the Session 1980–81—which, if my memory serves me, was not one when my party was in power—when some 57 Bills were introduced. Also, in 1981–82, some 46 Bills were introduced and in 1984–85, some 54 Bills were introduced. Some complaints therefore should perhaps have been addressed to the noble Baroness, Lady Thatcher, during that period. I was not here at the time, so I am not sure whether there were complaints. Therefore, this is not an unusual legislative programme.
	I have sympathy with the points that both the noble Lords, Lord Roper and Lord Cope of Berkeley, made about Friday sittings. A great deal of the work that we do on Fridays, as the House knows, consists of Private Members' legislation. I, for one, having been a Private Member for a long time, attach importance to that. I would love to find better ways of managing the business, and all suggestions will be gratefully received. However, we need to bear that in mind when we complain about Friday sittings.
	The noble Lord, Lord Cope of Berkeley, referred to the proposal that the House should sit during the Conservative Party conference. I know that Members opposite are anxious to get away at that time. I point out again that when the noble Baroness, Lady Thatcher, was in charge, during the Session 1989–90 the House sat during the Conservative Party conference; in 1985–86 the House sat during the Conservative Party conference; in 1980–81 the House sat during the Conservative Party conference; and in 1979–80 the House sat during the Conservative Party conference. Those dates were under a Conservative government. So it is not an uncommon decision to be made. Whether complaints were made in the House, I do not know because I was not here.
	The noble Lord, Lord Cope of Berkeley, asked me how I describe the period that he calls the "conference recess" between the September sitting and the sitting at the beginning of October. I do not know what to call the recess, but, as far as I am concerned, any recess has the characteristic of being a blessed relief. That fortnight is no different from any other period.
	I am grateful to the noble Lord, Lord Roper, for acknowledging that it is difficult to manage this programme. I hope that the House appreciates that we do work hard, in as much agreement as we can, but it is surely far better to sit on that Friday than to sit in the following week.

Lord Clinton-Davis: My Lords, does my noble friend recognise that 6th October is also Yom Kippur? For the many Jewish Members of this House, it is quite impossible to attend, whether one is pious or not. I ask him to think again about that date.

Lord Grocott: My Lords, I say to my noble friend that this is not by any means the first time that the House has sat at that time of year. I recognise that almost any date can have particular difficulties. I do not in any way dismiss his point. All that we in the usual channels can do is to try and please most of the people most of the time. Whether we succeed or not is for the House to judge.

Lord Renton: My Lords, is the noble Lord aware that the number of government Bills per Session is not the only relevant criterion for measuring government business? In this Session, the Government have produced an absurdly large number of very long Bills, including, for example, the Criminal Justice Bill, which is already 374 pages long and has 307 clauses and 32 schedules; moreover, the clauses and schedules may be added to. That is not the only Bill that has an excessive amount of detail. Will the Government persuade Ministers, civil servants and parliamentary counsel in the next Session of Parliament to be more in favour of statements of principle rather than masses of detail?

Lord Grocott: My Lords, I say to the noble Lord, Lord Renton, that, yes, there are long and complex Bills but this is not the first government who have introduced long and complex Bills. He mentioned the Criminal Justice Bill; I remind him that the public outside this House are waiting for Parliament to enact that Bill and the Anti-Social Behaviour Bill, which is not quite so long or complicated, because they contain many aspects that respond to the public's requests and demands. That is particularly the case with the Anti-Social Behaviour Bill. I know that we should not be too partisan in this place but there have been two general elections and on each occasion the government were returned by a massive majority. The Government have a right to have their legislation considered in this House. I agree that legislation gets rather complex and I very much agree that the shorter and sharper the Bill, the better. However, I repeat that this is not the first time that governments have introduced complex pieces of legislation.

Lord Carter: My Lords, my noble friend gave some interesting figures but can he tell us the year in which a government had the House sitting until 11th August? Why they did not sit on 12th August, I cannot imagine. I believe that the same government required us to sit in September, unusually, because the programme was out of control.

Lord Grocott: My Lords, my noble friend did not give me notice of that question so I do not happen to have the answer to hand. However, I am absolutely confident that, because he asked the question, the answer to both will be that that occurred under a Conservative government.

Lord Carter: Yes.

Lord Marsh: My Lords, does the Minister agree that as this debate continues, it only confirms what we on these Benches have known right from the beginning: that both parties make an incredible mess of the programme in the run up to every recess?

Lord Grocott: My Lords, I can only assure the House that there is one person who would dearly like to move smoothly towards an early recess more than anyone else, and that is me.

Lord Forsyth of Drumlean: My Lords, is the problem not the size of the Government's majority but that the other place is no longer doing its job properly and that it is sending huge volumes of legislation up here that has not been looked at? The Government's so-called modernisation programme is resulting in the House of Commons, which contains full-time paid Members, sitting fewer hours, while this House, with part-time Members, is expected to do more and more to make up for the job that they are not doing?

Lord Grocott: My Lords, I say to the noble Lord, Lord Forsyth, that that is not a bad idea in a bicameral system. As someone with long experience of another place, I wonder whether he accepts the criticism that while he was a senior Minister and his government were in office, the other place was doing too much, or did something miraculously change on 1st May 1997?

Noble Lords: Yes.

Lord Grocott: My Lords, I accept that it changed, and I believe that it did so for the better. It is important that both Houses exercise their scrutiny responsibilities properly. However, when the system is working properly, there should be a complementary system between the two Houses. I see nothing at all untoward in this House having a particular expertise in a particular area and spending longer on that matter than the other House, and vice versa. I return to the idea that we are being less than precise with each other when we suggest that all of those difficulties happen to have occurred since 1st May 1997 and that nothing similar happened during the previous 18 years.

Lord Graham of Edmonton: My Lords, "subject to the progress of business" is a phrase that has been used down the years by Chief Whips of all parties on many occasions. It is not a trite phrase; it means what it says. The Government are entitled to try to get their business through by agreement.
	I am struck by the fact that every word that has been said in this debate, with the exception of the Chief Whips, must be studied. However, I am heartened by the fact that the two Chief Whips who spoke, besides the noble Lord, Lord Grocott, recognised that, in a very difficult situation, the best has been made of what one might call a bad job. That is not to say that they agree with it, but in the end they have had to agree to the proposition of the Government Chief Whip. I am heartened that that is their relationship; that is a good thing.
	The Government Chief Whip would be well advised to try to take a longer look at the business, if possible. Since we returned from the Whit break until now, days were set down for progress. The problem occurred because we collectively decided to take matters late into the night and forced business on to a Friday. I regret the fact that the Government Chief Whip has extended the Session. However, I very much hope that he will take note of the fact that although that is to the dislike of the House, we give him our support.

Lord Grocott: My Lords, as ever, I am grateful to my noble friend for the friendly way in which he spelt that out. I shall give one more statistic; it is the last one that I will give to the House. There is no mystery about the job; it is simply a question of trying to fit the demands into the time available. I ask the House to reflect on this statistic if on nothing else: the slowest Bill in the previous Session on the Floor of the House—the National Health Service Reform and Health Care Professions Bill—took 21 minutes per group of amendments. In this Session, the Licensing Bill took 21 minutes per group, the Community Care (Delayed Discharges Etc) Bill took 21 minutes, the Courts Bill took 23 minutes, the Sexual Offences Bill took 24 minutes, the Communications Bill took 24 minutes and the Regional Assemblies (Preparations) Bill took 30 minutes. The simple fact—I do nothing other than report it to the House—is that Bills are taking longer in Committee in the Chamber than they did in the previous Session. I simply put those figures to the House. If anyone wishes to suggest anything different about those statistics, I shall be grateful for any suggestions. Clearly—any government must acknowledge this—Bills that take an average of 30 minutes per group of amendments on the Floor of the House will inevitably slow down the programme. I make no more bold a statement than that.

Baroness Gardner of Parkes: My Lords, the Chief Whip said that we have spent Friday after Friday on Private Members' Bills. That is really a terrible waste of time—I speak as one who has moved a Private Member's Bill. We are able to air issues very well in this House, but there is no hope whatever of those issues getting a fair hearing when they reach the other place because they go at the end of the queue. Can the Government look at the procedures between the two Houses? If a Private Member's Bill goes through the Commons, we give it a very fair hearing in this House.

Lord Grocott: My Lords, I do not disagree at all with the thrust of that suggestion. The system is not the most efficient. However, those who speak for governments are necessarily diffident about giving advice on the way in which the Private Member's procedure should be considered. I agree that there is frequently wasteful time between the two Houses.

Lord Donoughue: My Lords, I support my noble friend and congratulate him on the skill with which he has explained the difficult situation in which the Government find themselves: their programme is somewhat gridlocked and there have been many complaints about the intrusions on noble Lords' time. Does the prospect of a long, complex and controversial Bill to ban hunting help the Government and my noble friend in this situation or is it unhelpful?

Lord Grocott: My Lords, I discovered in this job that, the longer one goes on, the less one is concerned about content and the more one is concerned about getting the machine going on the rails. I know my noble friend's views on this matter and I know the answer that he wants me to give. But I simply say to him that these Bills are in the Government's legislative programme. So far as it is within my power, I shall ensure that the House has reasonable time to consider them all.

Lord King of Bridgwater: My Lords, does the Chief Whip accept that it is one thing for a government to invite their own supporters not to go to a party conference but it is quite another for them to prevent the supporters of another party attending their party conference? Does he also recognise that there is a distinction? If a party conference takes place in Brighton or Bournemouth, it is possible for people to attend and also to take some part in the business of this House during that week. The next party conference of the Conservative Party will be in Blackpool, which will make it virtually impossible for Members to combine attendance at both. Therefore, will he confirm that, if that is the direction he is following, every effort will be made to ensure that there is no controversial business and that the least controversial business is taken during that week?

Lord Grocott: My Lords, I can certainly say to the noble Lord, Lord King, that, whatever business is or is not taken, as ever we shall try to secure agreement through the usual channels. I do not know whether it helps or hinders my colleagues to say this, but we make every effort to reach agreement and I can make absolutely no promises about what the business will be during that period. However, I am sure that the noble Lord, Lord Cope, will make his views known very clearly.

The Earl of Northesk: My Lords, I acknowledge the immense difficulty of the task, but can the noble Lord give the House an assurance that, in so far as is possible, the usual channels will attempt to ensure that our putative 10 o'clock cut-off time is breached as infrequently as possible?

Lord Grocott: My Lords, I say a wholehearted "yes" to that. I am a passionate supporter of the intention of the House normally to secure the conclusion of business by 10 o'clock. I freely admit that on a number of occasions during this Session—although not as many as in the same period during the previous Session—that 10 o'clock rule has been severely breached.
	However, I have to say to the House—again, there are no tricks or smoking mirrors in this—that if, in some respects, marginal changes could be made to the conduct of business here, then it would be possible to meet many more demands. For example, if—I should not say "if" because it is history now—the Sexual Offences Bill had been considered in Grand Committee rather than on the Floor of the House, I should have been coming to the House now to say, "Can we rise for the summer Recess a little earlier than anticipated?" Whenever I say anything such as that, I am told, "Oh, you are threatening the House". I hope that noble Lords will believe me when I say that I am not threatening the House; I am simply presenting the dilemma that I have to work daily to resolve.
	I simply urge the House to give some consideration to the fact that there are many demands on the precious prime time spent on the Floor of the Chamber. This is half our Parliament. Perhaps we should consider carefully whether major debates on Select Committee reports and other issues of that kind are better held on the Floor of the House and whether it would be possible to move more Bills into Grand Committee. However, I am getting into deep waters and shall keep quiet.

Lord Williams of Mostyn: My Lords, I have the impression that we have now discussed these issues sufficiently.

CAP Reform

Lord Whitty: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Environment, Food and Rural Affairs. The Statement is as follows:
	"With permission, Mr Deputy Speaker, I wish to make a Statement on the outcome of the final negotiations on the reform of the common agricultural policy, which concluded in Luxembourg at 6.35 this morning, UK time.
	"We approached the negotiations with two clear objectives: first, to get the best settlement we could for UK farmers, consumers, taxpayers and the environment; and, secondly, to get an agreement which could lay the foundations for a successful outcome at the WTO negotiations in Mexico later this year.
	"In pursuit of these objectives, we set negotiating goals: to simplify the CAP, reducing the burden on farmers; to provide for a substantial shift of support from production to a wider range of rural and environmental activities; and to give the EU a strong negotiating stance in the WTO negotiations that reach a key point in Cancun in September. I am happy to say that the agreement today delivers what we wanted—real change.
	"The key points are: breaking the link between farm subsidies and production in order to reconnect farmers to their markets, reduce damaging environmental impacts and reduce bureaucracy—this is at the heart of our approach to sustainable food and farming; cross-compliance to make subsidies dependent on meeting standards in key areas, such as environment and animal health and welfare; support prices for butter and rice are reduced, bringing them closer to world prices to the benefit of consumers; and there is a new financial discipline, which will trigger action to reduce subsidies if CAP expenditure looks to be in danger of exceeding the agreed ceilings.
	"Today's settlement includes elements that were not even in the January package and therefore, in some respects, it goes beyond the initial proposals. The first is national envelopes, which will allow us to develop targeted schemes to promote sustainable and environmentally friendly farming. Secondly, we have secured a further switch of resources to the second pillar and an earlier start date for modulation. The second pillar package that we have secured is more than a third larger than was available in the January proposal. For the first time, modulation applies on an EU-wide basis, switching support from production subsidies to targeted support for environmental and rural development objectives across the European Union. Thirdly, we have succeeded in protecting UK farmers from the immediate threat of an unfair settlement as part of the financial discipline process. I will be placing a detailed summary of the agreement in the Library of the House, and I wish Members happy reading.
	"The most radical and most important element in the package is the new single farm payment, which we can use to replace the plethora of existing direct payment schemes, such as arable aid, suckler cow premium, beef special premium, slaughter premium, extensification premium and sheep annual payment premium, to name but a few. This will greatly simplify the bureaucracy associated with all those schemes. But, more importantly, because that payment is no longer linked to production, farmers will be free to produce for the market rather than the subsidy.
	"Farming, consumer and environmental interests have all strongly supported a move of this kind. We will, of course, consult on the detail of how to proceed, especially with use of the national envelopes and the important new provisions for cross-compliance.
	"Decoupling is also particularly important in the WTO context. This deal enables the EU not only to meet but to better the domestic support targets that have been proposed in the WTO negotiations. These reforms will reduce the distortions in world markets that the CAP has caused and will accordingly contribute to a successful conclusion of the Doha development round. I hope our trading partners will recognise the scale and importance of this change and respond positively to it.
	"Reaching this agreement has taken an immense and united effort, and I want especially to thank our dedicated team of officials, my many Cabinet colleagues who have actively engaged in support of our discussions, and of course our colleagues in the devolved administrations, who have been closely involved throughout. It shows what we can achieve by working constructively with colleagues in the Agriculture Council. In particular, I want to pay tribute to Franz Fischler, who showed considerable courage and tenacity in piloting through this agreement.
	"It is hard to over-state the importance of this morning's agreement in transferring the core elements of the CAP and laying down a new direction for its future evolution. Giorgios Drys, who has done an excellent job piloting the council through these negotiations, said that we needed to get agreement for a new CAP—and we have".
	My Lords, that concludes the Statement.

Baroness Byford: My Lords, I am grateful to the Minister for repeating the Statement made this afternoon. I should like to record our gratitude to Mrs Beckett for so quickly returning to the House after the agreement was reached.
	The agreement, while welcome, falls short of some of the original proposals. Three weeks of wrangling have ended up in a fudged compromise. I ask that government time be allocated to enable the House a full debate on the details and the implications of the agreement, once the details are fully known. As the Statement has shown, it really is a skeleton at this stage; I do not accuse the Minister of that—it is a fact. We must wait to see the further details which will arrive in the Library later.
	We welcome the move on decoupling, which should reduce market distortion—although I understand that up to one-fifth of the modulation money may return to the European pool to be used as the Commission decides. I ask the Minister whether objections were raised to this. This would surely favour smaller, continental farmers and disadvantage UK farmers. That cannot be right; we must look closely at what is proposed.
	As regards the environment, the receipts from the EU-wide modulation may be insufficient to put in place the recommendations made in the Currie report. Does the Minister accept that this is a possibility? If so, how will the Currie recommendations be achieved?
	I am concerned that the implementation of the whole package has been delayed until 2005 and that some countries have the option to delay it further, until 2007. I trust that the Government fought strongly against this, but we on the Conservative Benches find it unacceptable. Does not the Minister accept that the compromise which gives other countries options to maintain links, at least in part, with production, could lead to market distortion? Might it not also disadvantage UK agriculture and—more importantly—developing countries?
	Does the Minister accept that it is likely that the UK will lead the reformers? Will he ensure that we will not be losers as well, should the Government not ensure a fair deal for UK farmers?
	We welcome in the Statement the aim to simplify CAP and reduce the burden—especially that of regulation—on farmers. We also look to see where the EU will give a strong stance in the WTO negotiations. I believe that that has been half achieved, although if we had managed a full swing of all countries at the same time, we would have had a stronger stance in Cancun in September.
	The Statement defines clearly that,
	"there is a new financial discipline which will trigger action to reduce subsidies if CAP expenditure looks to be in danger of exceeding the agreed ceilings".
	I ask the Minister what is anticipated, and how that will be achieved.
	The Statement also deals with the question of national envelopes. Is the Minister content that the national envelope scheme envisaged will in fact allow fair competition between existing EU countries and those who will shortly join us?
	As regards farming, consumer and environmental interests, the Minister said,
	"We will, of course, consult on the detail of how to proceed, especially with the use of national envelopes and the important new provisions for cross compliance".
	Could the Minister give us some steer as to the timetable envisaged?
	Further on in the Statement, the Minister declares that,
	"I hope our trading partners will recognise the scale and importance of this change and respond to it positively".
	We do too, because it is hugely important that at the WTO talks, we get the EU's move recognised and taken into consideration.
	In placing the detailed summary of the agreement in the House of Lords, will the Minister remember our desire to fully debate it in parliamentary time. Instead of debating the Hunting Bill, 17th July might be an appropriate time to do so.

Baroness Miller of Chilthorne Domer: My Lords, we on the Liberal Democrat Benches welcome the news of success on CAP reform. I congratulate Mrs Beckett and her team, and the noble Lord, Lord Whitty, too—not only for the outcome, but for their tenacity and hard work. I also record our gratitude to Franz Fischler, because he in particular should take great credit for having stuck with what must at times have seemed a thankless task.
	We have as good an outcome as could be expected at this stage. We especially welcome decoupling. Future success depends heavily on how we choose to implement this at national level. An early debate in the House would be helpful, but I would also welcome comment from the Minister today as to the time-scale and extent of the consultation.
	I especially welcome the greater-than-expected success in switching resources to the second pillar. Rural communities in Britain will be extremely thankful for that. One area that concerns me and which we should get right, given that we have discretion for them, involves young entrants to farming and young farmers who will inherit their families' farms. We must make sure that whatever system we devise is truly encouraging to them. It is no good to look to the future for a vibrant farming sector if no one really wants to go into it.
	We should look also to the processing and marketing chapters. I particularly welcome what I understand to be a much-enhanced food quality and national assurance scheme effort and that producer groups will be able to make progress in promoting their products.
	I would like the opportunity to debate all that detail in the House—especially in the light of the contribution of the noble Lord, Lord Haskins, to our countryside debate the other day. While I am sure that he will be able to streamline rural delivery, it cast a slight chill into my heart to hear that he is still looking at too great a scale of farm, and that his vision of our future is not based on the small, family farms that are so crucial, not least to our management of landscape. All noble Lords will remember, as I do, the importance of that link between farming landscape and tourism, and the contribution of tourism to our national economy.
	I welcome this progress; it gives us a brighter future to work towards. I feel much more optimistic now that we can go to the Cancun round of the WTO with our heads held higher because Europe has kept faith with the rest of the developing world. It is now clearly incumbent upon the United States to review their farm subsidy system, which is out of line with the rest of us, and to do something about it.

Lord Whitty: My Lords, I thank the noble Baronesses for what is on balance a substantial welcome for what has been achieved in Luxembourg—not just overnight, but over months of bilateral, multinational negotiation.
	I was slightly taken aback by the noble Baroness, Lady Byford, calling this "a fudged compromise" at the beginning of her remarks which ended up by being extremely welcoming and welcome.
	A fudged compromise is the last thing this is. It is a clear, strategic shift after 50 years of CAP away from wasteful and often environmentally damaging production subsidies towards a system that sustains our countryside and allows farmers to produce for the market and not for the subsidy. This is a dramatic and historic change and one which should not be underestimated.
	There are a few compromises at the edges. We needed to make them in order to reach the deal. That was always going to be the case. But in many respects, we have a better deal not only than anyone expected but than appeared to be the case in terms of Commissioner Fischler's proposals in January. Much of that is down to the good working between ourselves, the Commission and the agriculture Ministers of those countries which supported reform.
	It is also important to note that throughout the process we have received the support of the major farming unions within the United Kingdom. That was a great strength to us and, if I may say so without disparaging continental counterparts, a great example to some of them.
	The noble Baroness, Lady Miller, asked a number of questions. She asked about the modulation and the 80 per cent. Clearly, there is some skewing towards the protection of smaller farms. That was always going to be inevitable and it is much less than appeared to be the case at one point. And we get at least 80 per cent of that money back, which is considerably more than looked guaranteed. We can get more than that, but we are guaranteed to get 80 per cent back as compared with the current situation. Under the existing second pillar, under which we got back only 3.5 per cent of the money spent, the United Kingdom will get back a minimum of 11 per cent. That is an extremely substantial improvement for us.
	The noble Baroness also asked about the date of 2005 as distinct to 2004. When we set out on the negotiations it was intended that we start in 2004 but, as they have taken somewhat longer than originally hoped, it is sensible to allow enough time. We do not yet have the legal regulations laid and we need to set up the new administrative systems for the operation. The sensible date seems to be 2005, and the United Kingdom ultimately supported that.
	We were not happy about some countries having the opt-out to 2007, but that, too, was part of the final compromise. Far from that being to the disadvantage of UK farmers, it will mean that UK farmers are into the new system ahead of those countries which foolishly choose to delay the implementation of the new system for another two years. We will be operating in a more market-oriented and environmentally effective system before what I believe will be a minority of countries which used to take advantage of that delay. In so far as there are market distortions, their effect will benefit UK farmers who will be operating more as commercial farmers as against the minority of continental country farmers who operate differently.
	In terms of the WTO effects, we believe that this puts the European Union in a strong position in relation to our trading partners and, far from the EU delaying the opening up of trade to developing countries, a successful outcome to the Doha round is a major and significant shift of the EU position which should make those talks a success. Part of that success, as the noble Baroness, Lady Miller, indicated, will be that the United States moves in the same direction. The United States, as distinct from Europe, has been moving in the wrong direction over the past few years in relation to domestic farm subsidy. It now needs dramatically to reverse that position to make its contribution to a positive outcome and Cancun.
	Financial discipline relates to digressivity and the fact that we now have ceilings on the total expenditure. The arrangements from 2007 will be introduced and once expenditure gets within £300 million of that ceiling there will be a cap on particular forms of expenditure. Therefore, we cannot have a repeat of the situation we occasionally experienced with the CAP, where expenditure gets out of hand.
	The national envelope is beneficial to us and we can use that flexibility and subsidiarity to the advantage of the UK countryside for our particular purposes. It provides the flexibility we are seeking and does not disadvantage the UK, as some are suggesting. There will be consultation on that and on many other aspects of the agreement, beginning almost immediately and intensively once we have tabled the regulations from the Commission. We have some time to get this right and I am sure that the farming organisations, rural interests, the environmental organisations and others will wish to be involved in those discussions.
	As the noble Baroness, Lady Miller, said, one of the most important aspects of this is the increased importance of the second pillar. It is significantly larger than appeared likely at the beginning of this year. It will enable us to expend what have previously been production subsidies in a way which benefits the whole countryside and its environment.
	The noble Baroness was right in saying that part of the agreement needs to be directed at making farming attractive as a commercial and profitable enterprise. Some of the provisions under the second pillar will help government to do that, but the UK Government are already committed under the post-Curry strategy, to support the industry in developing assurance schemes, processing and marketing, the development of producer groups and so forth. This move at EU level will help sustain that position, too.
	Both noble Baronesses referred to the question of debating the matter in this House. I could not possibly comment on the specific suggestion that the noble Baroness made in relation to a certain date in July. Clearly, the usual channels will need to consider that. We have had a recent important debate on CAP in this House and we will have to consider whether we should do so again and at what point that would be appropriate.
	I thank the noble Baronesses for their comments and underline the unity of purpose across not only government and the farming organisations, but also environmental bodies and industry at large because of its interest in the wider trade round. The United Kingdom has acted as a collective entity on this occasion and the comments in this House reflect that.

Lord Harrison: My Lords, I want to take my cap off to this CAP reform and in so doing to thank two individuals in particular. First, I thank EU Commissioner Franz Fischler, who to my certain knowledge has attempted to resolve the issue for some six, seven or eight years. Secondly, I thank our own Secretary of State, Margaret Beckett, and her team who have tirelessly worked to ensure this success in the face of criticism from the press and "Farming Today" and others who despaired of her achieving this wonderful outcome. It will be a good outcome for farmers, for the environment and for developing countries because it enables us to hold our head high in the WTO round.
	Will my noble friend accept that one other huge benefit accrues from this agreement? It is that for those of us who want to support the Government in their pro-European stance, which was announced by the Prime Minister and so proselytised, the biggest blot on the landscape for too many years has been a failure to reform the CAP. That is now being done and it is a tremendous plus for Britain and Europe.

Lord Whitty: My Lords, I gratefully accept the congratulations on behalf of Margaret Beckett, who will pass them on to Franz Fischler. Both have made a significant contribution to the agreement. It shows that when the Commission shows leadership on behalf of Europe as a whole and when leadership is shown in this country, we can achieve a positive outcome. During the whole period of our membership of the Common Market, as it was, and the European Union, as it now is, successive governments have attempted to change the CAP and the distortions that it causes within Europe to the environment, the markets and international trade. The fact that we have been able to change it in a significant way this week is a historic turning point which will benefit farmers, consumers and the environment alike.

Lord Hylton: My Lords, the Statement mentions distortions in trade. Can the Minister comment on export subsidies paid by the EU and say whether the full text covers that point? Does he agree that dumping—for example, milk powder—has had the effect of destroying local markets for farmers in developing countries? Is any timetable built into the agreement for ending export subsidies?

Lord Whitty: My Lords, this agreement does not specifically cover export subsidies. The position of the EU going into the Doha round of WTO talks envisaged a phasing out of export subsidies. The exact detail will be negotiated with our trading partners. The timescale for that will be negotiated with our trading partners in Cancun.
	I agree with the noble Lord that some of the effects of the existing and past export subsidies have been hugely damaging to some developing countries. It is part of this Government's intention to ensure that they are phased out as a result of agreements to be reached in the WTO.

Lord Mackie of Benshie: My Lords, I congratulate the Government and the team for the work they have done and am glad of the agreement reached. However, the Minister mentioned that there were certain compromises. Before I read all the papers he has accumulated for me in the Library, perhaps the noble Lord can tell me what constitutes a small farm. In this country, our family farms are rather larger than on the continent. That will be important. On decoupling, can the noble Lord also say whether the subsidy—the joined-up payment, whatever one calls it—will go with the land and not the person? Finally, can the Minister say something about milk quotas? Is that one of the compromises?

Lord Whitty: My Lords, perhaps I may take those questions in reverse order. The milk regime is one of the more disappointing parts of the deal. The milk proposals came slightly later than the rest of the package; we were working on a different timetable. But we are not happy with the outcome relating to milk either on the extension of quotas in time—although not as much as was proposed in terms of numbers, which would have been helpful—or on price reduction. So milk is one sector which we would have liked to have been more decoupled than the proposals allow. However, I believe that we shall move in that direction. Certainly the commissioner has that in mind.
	The decoupled single payment will go in the first instance to the producer who was producing as of 31st May this year. The quantum will be based on an earlier reference period. It will be the person who was the producer on the land, whether landlord or tenant, at 31st May this year. The full details of that are partly in the document but much of it will be spelt out later in, no doubt, a hugely complex legal form.
	The payment is attached not to the land, but to the producer. If it is transferred it has to be transferred to other land which will be subject to the same cross-compliance rules. Therefore there can be no loss of land to which the subsidy and cross-compliance rules apply.
	The noble Lord is right about small farms. The relatively small part of the package which is geared to small farms—the franchise from the modulation payment—will, by and large, benefit very small farms and not the average-sized British farm. However, the average-sized effective British family farm should benefit from the other freedoms that the package produces.

Lord Carter: My Lords, it is correct to say that the shift of production support away from price support began in 1990 with MacSharry. It has taken 13 years to get to the point we are at now, which is a very substantial shift in policy.
	It is hard to judge the value of the outcome. Perhaps the easiest way to do so would be for my noble friend to compare the final outcome with the British opening position and, say, the French opening position to see what has shifted in negotiations.
	The issue of land is extremely complicated. I believe that my noble friend gave the date of 1st May. Does he agree that it would be wise for any deals in land between 1st May and perhaps the autumn—we may then know how the regulations will look—to include some legal arrangement so that if things change from what those who are doing the deal think, they can be protected?

Lord Whitty: My Lords, on the latter point, I would very much hesitate to be a Minister advising anyone on how to deal in land now or at any other point. The date is 31st May. The person who is producing on the land and had the old, historic subsidies would be entitled to it at that point. The full legal text will be available in a few months' time. No doubt people will make their decisions in that light.
	While I always hesitate in any way to criticise our French colleagues, they have their position to take and have taken it fairly robustly through this process, and we are all agreed on this outcome. It is right to say that the French have moved dramatically. They moved from a position of total opposition to any decoupling of any payment whatever to a position where the principle is decoupling of everything and there are some options on some of the regimes for them partially to recouple back—for example, 25 per cent of arable payments. But the balance is clearly much closer to the UK Government's opening position, on which we were largely supported by the Germans, the Danes, the Swedes and the Dutch, than to the position of that group of countries led by the French.
	I do not wish to become triumphalist about this, but a significant shift to what has been the historic British position over the past years has been achieved over the weeks and months of negotiations.

Baroness Warnock: My Lords, before the Minister sits down, perhaps I may say that he should be a little triumphalist. It is a matter of tremendous congratulations.

Lord Whitty: My Lords, all right. Just a bit.

Baroness O'Neill of Bengarve: My Lords, before the noble Lord sits down, perhaps I may say that my father, Conor O'Neill, negotiated our original entry into the common market. It was his greatest regret that these concessions had to be made and his judgment that at that time there was no way in, apart from making this concession. I wish that he were alive to hear this announcement.

Lord Whitty: My Lords, those of us who followed those negotiations at the time recognise what a difficult task the noble Baroness's father had at that point; and how we gained an awful lot from the rest of his negotiations. This may well have been a price worth paying for that. But it is also true that he and political parties on all sides at that time recognised the need for reform of the CAP. Regrettably, it has taken us this long to get there; but we are a very significant way there now.

Lord Sewel: My Lords, is the Minister aware that those of us who have been severe critics of the common agricultural policy—as it has developed it has been bad for producers, bad for consumers, bad for the taxpayer and bad for the environment—unreservedly welcome the Statement? It marks a major change in the future of agricultural support in Europe. It also justifies totally the Government's policy of engaging positively with our European partners. I do not think that we would have been able to have what is a triumph if we had not had that positive engagement with our European partners which has marked our relationship over recent years.
	The Statement clearly has major benefits in that the movement away from production subsidies, bringing agriculture closer to its markets, is wholly to be welcomed. Does the Minister agree that as we move forward there are two tests: first, how Europe is able to contribute positively to the WTO round and further developments there, in particular in relation to the still restrictive protectionist policies of the United States; and, secondly, perhaps internally, that a movement away from agriculture support per se to rural developments in the broader sense is the greatest challenge we face in relation to our rural areas?

Lord Whitty: Yes, my Lords, I agree entirely that that reflects a great deal of co-operation bilaterally and multilaterally with our European counterparts. The Government's engagement in that has led to us being able to deliver this significant change. The noble Lord is also right that we now face an even bigger challenge in terms of making a success of the WTO talks and ensuring that the Europeans have a constructive effect on those talks. We are starting from a platform that is very positive, whereas a few months ago it looked as though Europe may be going into that discussion with a negative stance.
	The noble Lord is also right that we are moving away from a rural policy that is related to subsidising certain parts of food production to one that is of benefit to the rural economy and to rural communities as a whole, including farming. That is a strong and beneficial development.

Lord Avebury: My Lords, the Minister has said that we are moving away from a system of subsidising food production. Are subsidies to be reduced also in relation to tobacco production?

Lord Whitty: No, my Lords. The position on tobacco, sugar and various other commodities was not covered by this package because the timescale of review of those changes is different. We are expecting further proposals from the Commission on sugar, tobacco and other products later this year. I expect that the same principles will begin to apply in those sectors as well.

Lord Dubs: My Lords, I join in the congratulations to the Government on having achieved a prize which, until recently, seemed almost entirely beyond reach. What will be the effect of the proposals on the budget? Can my noble friend say a little more about the effect that they will have on the situation when 10 new countries join the EU?

Lord Whitty: My Lords, clearly those two questions are connected. The negotiations redistribute, rather than alter, the ceiling on the CAP budget, although there is a small element of degressivity built in to the direct payments. Of course, that budget will have to apply to 25 countries, rather than to 15. Therefore, the cost of the budgets per country will be significantly less as a result of that. This, of itself, does not alter the total financial perspective because the ceiling was set at the end of last year in Brussels.

Lord Clark of Windermere: My Lords, I welcome the deal and join in the congratulations. It is a major step forward. As someone who has spent 30 years on the Labour Benches arguing that we need to move subsidies to farmers from production to environmental and other friendly matters, this is perhaps a red-letter day. First, what does this mean for the consumer? Secondly—I declare an interest as chair of the Forestry Commission—does part of the deal relating to the second pillar mean that farm woodland support will be eligible for support under the CAP?

Lord Whitty: My Lords, on the second question, woodland support in certain forms is available under the current Pillar 2 system. This significantly increases the total amount of funds under the Pillar 2 system; therefore, that and other schemes under the system would potentially benefit.
	On the benefit to the consumer, that will mean that the European farmer—the British farmer in particular—will produce what the consumers want and not what the subsidy provides for. That should mean that the value to consumers and the ability of consumers to choose high value products that are also profitable to the farmer will significantly increase and the trading applications also mean that in the longer run the cost for any given value should also decrease. Of course, consumers are also taxpayers, so taxpayers will pay for something that is beneficial and not for something that leads to distorted production. Therefore, in many ways consumers will benefit.

Communications Bill

Consideration of amendments on Report resumed.
	Clause 101 [Civil liability for breach of conditions or enforcement notification]:

Baroness Buscombe: moved Amendment No. 65:
	Page 97, line 1, leave out paragraph (a).

Baroness Buscombe: My Lords, when the Bill was first published, the UK mobile phone operators had two objections to Clause 101(1)(a), which gives third parties the right to sue for breaches of general conditions regardless of any ruling by Ofcom: first, that this right undermines the authority of Ofcom and UK regulatory policy could be developed through case law rather than through Ofcom's own channels for policy development, including consultation with consumers and industry; and secondly, that the right opens up an unnecessary source of regulatory risk (and therefore cost) for the communications providers, a cost that tends to get passed on to consumers.
	At Report stage in the House of Commons, the Government brought forward an amendment to the Bill (now part of the Bill in Clause 101(4) and (5)) that provides that a third party will need the consent of Ofcom prior to the bringing of proceedings. That may address the first objection and we therefore welcome the development. It may be that the amendment will, in practice, deal with the second objection too but it still does not entirely eliminate the possibility of being sued for breaching Ofcom's rules without the regulator intervening in the process.
	At Committee stage in your Lordships' House, the Government argued against the amendment using, in our view, an incorrect argument. In col. 710 of Hansard on 20th May, the Government stated that a third party had no right of redress against a first breach, even when Oftel had confirmed that a breach had taken place and that that effectively gave an operator a free strike. That is not the case. The third party can sue for damages on the first occasion after Oftel's determination.
	It is not expected that this power will be widely used, particularly as complainants have the option of having a complaint resolved by Ofcom (or for small claims some other independent resolution procedure such as the Ombudsman) for free. The main concern is that a very large multinational company may use this right to ride a coach and horses through the carefully drafted policies of Ofcom by going straight to a court, albeit with Ofcom's consent.
	While acknowledging that the need to obtain Ofcom's consent reduces the risk that regulatory policy could develop independently of Ofcom, the new wording in the Bill raises some other issues. First, there is no indication of the basis on which Ofcom would decide whether to consent to such proceedings or the procedures the regulator would follow in taking such a decision, for example, allowing the litigants to make representations. Secondly, if Ofcom had not previously investigated the matter, it might feel compelled to conduct a full investigation before deciding whether to consent. However, if the breach complained about is in the past, then that would be just a waste of Ofcom's resources. Thirdly, if Ofcom gives its consent to the action being brought, could that actually prejudice a defendant's position? The implication of Ofcom's consent would be, rightly or wrongly, that Ofcom considers a licence breach to have occurred, or at least that it is happy for the court to conclude that such a breach occurred. It would therefore be preferable to delete Clause 101(1)(a) as the amendment seeks to do. I beg to move.

Lord Avebury: My Lords, we agree entirely with the argument that has been advanced by the noble Baroness, Lady Buscombe. I shall not repeat what she has said about the remarks of the noble Lord, Lord McIntosh, in Committee, except to say that we entirely agree with her analysis. The Minister got it wrong when he said that a third party could not sue for damages on the basis of the harm caused by the breach that led to Oftel's determination. As the noble Baroness said, that was said on 20th May at col. 710 of Hansard.
	I have one point to add to what the noble Baroness has said. We see this provision as being a new departure in the regulation of communications networks and that there is no requirement in the new directive for it. There is no evidence of harm being caused by the lack of the provisions in the existing regime. So we support entirely what the noble Baroness has said.

Lord McIntosh of Haringey: My Lords, although this is exactly the same amendment as in Committee the arguments now being advanced for it are rather different. Virtually the only point of contact which the noble Lord, Lord Avebury, in particular brought forward last time is the right of third parties to sue on the first occasion.
	In the light of the fact that I have only just heard the arguments from the noble Baroness, Lady Buscombe, and some of the arguments from the noble Lord, Lord Avebury, I will take the matter away and discuss it further with both of them before Third Reading. I would wish the amendment to be withdrawn, but I do not wish to resist it on the same basis as last time.

Baroness Buscombe: My Lords, I am very grateful to the Minister for his response. Perhaps I have taken him a little by surprise with my arguments today. I am extremely grateful to him for the opportunity and I am sure the noble Lord, Lord Avebury, would concur that we would be grateful for that meeting and discussion. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 103 [Application of the electronic communications code]:

Lord Avebury: moved Amendment No. 66:
	Page 98, line 41, at end insert—
	"( ) In this section persons to whom the electronic communications code may be applied shall not be restricted to telecommunications operators."

Lord Avebury: My Lords, since we discussed the matter in Committee, the noble Lord, Lord Evans, has written to me, drawing attention to the consultation paper, The Granting of the Electronic Communications Code by Oftel, issued by the Director General of Telecommunications on 2nd April. In particular, he drew attention to paragraph 1.12, which states:
	"the Telecommunications Code applies only to telecommunications system providers. The Electronic Communications Code will apply to all electronic communication network providers, including broadcast transmission providers".
	The noble Lord says that he does not think anything could be clearer than that. It is true that the intention is plain, but I suggest to your Lordships that words in a consultation document do not have the force of law, which I pointed out on the previous occasion. I quoted paragraphs 2.12 and 2.13 of the consultation paper and I said that the words gave encouragement to the owners of towers and masts, whose efforts have already led to extensive sharing of facilities, reducing the number of sites needed.
	Annex A, which deals with the criteria for granting code powers, implies at paragraph 7 that broadcast transmission providers will not receive them automatically. Our amendment is modest and only embodies the sense of Annex A in the Bill, so we hope that it will commend itself to the Government. I beg to move.

Lord Evans of Temple Guiting: My Lords, as the noble Lord, Lord Avebury, said, Amendment No. 66 is designed to allow Ofcom to apply the electronic communications code to persons other than telecommunications operators. Under the new regime there will no longer be "telecommunications operators", as I said in Committee; instead there will be providers of electronic communications networks and providers of electronic communications services.
	A person who has the electronic communications code applied receives substantial rights and has substantial obligations imposed. The Bill is currently drafted under Clause 103(4) to allow Ofcom to apply the code to both those who will provide electronic communications networks directly and those who will make available conduit systems to providers of electronic communications networks.
	I assure you that the code can apply to providers of electronic communications networks other than the existing telecommunications providers and the providers of broadcasting networks such as Crown Castle will, like any other provider, be able to provide for code powers under the new arrangements. Indeed, the consultation paper already mentioned issued on 2nd April by the Director General of Telecommunications on The Granting of the Electronic Communications Code by Oftel makes it clear at paragraph 1.12 that,
	"the Telecommunications Code applies only to telecommunications system providers. The Electronic Communications Code will apply to all electronic communication network providers, including broadcast transmission providers".
	I do not think that that could be clearer, or that anything else could be achieved by an amendment to the Bill.
	We believe that the code should be available only to those who either have infrastructure or are providing conduits. Furthermore, extending it beyond those limits would upset the code's delicate balance. The proposed amendment would widen excessively the range of potential applicants for the benefits it provides and so undermine the balance.
	In Committee we understood that the amendment was intended to relate to a concern expressed by Crown Castle about the current procedures for the control of rent for space on shared transmitter masts. The code is not the applicable instrument for that concern. The market review of broadcasting transmissions services will determine what regime is applied in the future.
	All secondary legislation, including the general development orders, will, wherever we consider it necessary, be amended by an order made under Clause 399, so I ask the noble Lord to withdraw the amendment.

Lord Avebury: My Lords, It is helpful to have that assurance on the record, even though I would have preferred to have a provision in the Bill, because something written down in a code does not have the force of law. But having the Minister's assurances on the record goes some way to what we were asking for. Therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clauses 104 to 116 agreed to.
	Clause 117 [Conditions regulating premium rate services]:

Lord McIntosh of Haringey: moved Amendment No. 67:
	Page 111, line 13, leave out "or (11)" and insert ", (11) or (11A)"

Lord McIntosh of Haringey: My Lords, in moving the amendment I shall speak also to Amendments Nos. 68, 69, 71 and 72. It may be convenient to the House if I speak also to Amendments Nos. 69A and 70.
	We had a rough ride with comparable amendments in Committee, which we introduced in response to concerns from ICSTIS on premium rate services. Government Amendments Nos. 67, 68, 69, 71 and 72 deal with the issues we discussed in Committee in connection with what were then Amendments Nos. 122A to 122D. They sought to respond to the concerns expressed by my noble friend Lady Gould of Potternewton during Second Reading about regulating certain premium rate services emanating from abroad.
	As I agreed in Committee, officials have discussed the matters further with the operators and with ICSTIS, and I understand that these amendments meet the operators' concerns articulated during the debate, as well as those of ICSTIS.
	Amendment No. 68 is aimed at ensuring that even when a premium rate service provider is located abroad and the arrangements for the use of the electronic communications network for the provision of the premium rate service in this country is via an intermediary, there is still a person who is subject to regulation.
	Amendment No. 69, like the previous Amendment No. 122D, defines what is meant by an intermediary service provider for the purpose of these provisions. It is expanded slightly from the previous version to deal with situations in which there might be chains of intermediaries through which premium rate services might be delivered. Amendment No. 67 is consequential on those two amendments.
	Amendment No. 71 is new. It restricts the obligations that a code approved by Ofcom could place on a communications provider falling within subsection 117(11A). In accordance with this amendment, such obligations are permitted only if three tests are met: first, the provider concerned is the only person against whom it is practicable to take regulatory action; secondly, the obligation arises only after notice has been given by the code enforcer of the premium rate service and the manner in which it is alleged to have breached the code; and thirdly, the obligation is solely to secure that the network does not deliver the premium rate service to persons in the United Kingdom.
	I understand that that restriction removes the concerns of the operators expressed during Committee without jeopardising the effectiveness of the regulatory regime. Amendment No. 72 places the corresponding restriction on an order that might be made by Ofcom in the absence of a code.
	We have no desire to place undue burdens on providers of electronic communications services. In Clauses 117 to 121 we are providing a regulatory regime which enables the code-making body in conjunction with Ofcom to ensure that consumers are not disadvantaged by the less scrupulous PRS providers—which will be the primary target of the regulatory regime.
	But experience shows that there are times when the normal operation of the code is insufficient, and ICSTIS or Oftel has needed to ask—and, if necessary, to compel—the operator of an electronic communications service or network carrying the PRS service to act. It would be a matter of last resort that a network provider falling within Clause 117(11A) would be required to take action. But without that power of last resort, we would be leaving a great loophole in the arrangements, which I gather all interests agree should be plugged in the way that we now propose.
	The amendments would ensure that the PRS regime operates effectively but without placing undue burdens on the operators.
	Amendment No. 69A is at first sight very seductive. Nobody would argue that the interests of premium rate service providers—some of which have sadly shown themselves to be not terribly scrupulous—should be placed above the interests of the man, woman and child in the street. But it is too simplistic to say that we should include in the statute book a requirement that the new premium rate service regime places the interests of consumers above those of premium rate service providers. Taken literally, that could mean that consumers should pay next to nothing for the services, and providers should be deprived of a reasonable profit.
	The risk of following the approach in the amendment would be that ordinary, decent premium rate service providers would be unable to offer commercially viable services and the customer would be deprived of many services to which they have shown they want to subscribe. We know that there are lots of complaints about some premium rate services, especially those pandering to people's baser instincts. But that overshadows the fact that premium rate services are much in demand by consumers across a wider spectrum: information about news, weather, financial services and sport; product helplines and entertainment such as quizzes, competitions and voting on television shows. It is now a billion pound industry with above-average growth because consumers want to use it and there are providers to supply the public with what they want.
	In the premium rate service regulatory regime we need a continuation of the existing arrangements that seek to ensure that, among other things, consumers know that they are being charged a premium and the rate of the premium. There are arrangements for reducing the risk of inappropriate services reaching children and to enable the rogue elements in the industry to be dealt with effectively. The regime that we are providing for gives that assurance, so there is no need for the amendment.
	Clause 118(2)(b) provides that Ofcom must not approve a code unless the code-making and enforcing body is independent of the providers of premium rate services. There is therefore no need to fear that the code will lean unduly in favour of suppliers. The amendment is not only unnecessary, it could be positively harmful to the provision of services that consumers have shown that they want.
	We covered some of the ground on Amendment No. 70 in Committee, but I am happy to re-emphasise our agreement that we should not place unnecessary barriers in the way of innovation and investment in new services. That is particularly important in the sphere of premium rate services, in which there has been considerable growth in recent years with every prospect of it continuing.
	However, with the growth of new services, there are always dangers of abuse. While most premium rate service providers are perfectly honourable and provide good, useful services, some would use them to fleece the unsuspecting public, including, I am afraid, children. We must therefore be wary of what we do.
	I know that there are concerns about the current limit in the ICSTIS code of £20 before online services must be terminated by forced release. That limit related to only certain kinds of calls, notably online services, pay-for-product services and sexual entertainment services. In each of those categories, the code provides that the limit does not apply if ICSTIS gives prior consent. If business-to-business video conferencing were arranged in such a way that it fell within the provisions of the code applying for online services, it is likely that ICSTIS would give prior permission for the limits not to apply.
	Apart from that, the amendment is unnecessary. Ofcom is already constrained as regards approving a code for regulating premium rate services. In accordance with Clause 118(2)(d) to (g) it cannot approve a code unless it is satisfied that: it is objectively justifiable, it does not discriminate unduly, it is proportionate to the intended effect and it is transparent. Those are significant constraints on the actions of Ofcom. In my view, they are adequate to provide the right balance to ensure that any code does not unnecessarily constrain innovation and investment.
	Given the scope for abuse in this area, I do not think that we should feel comfortable with sacrificing customers on the altar of innovation and investment to new ways of ripping them off. I beg to move.

Lord Lucas: My Lords, I shall speak to Amendment No. 69A, which stands in my name. I am extremely grateful to the Minister for giving me the Government's attitude to the amendment before I speak to it. It will shorten my comments. I am also very grateful to my noble friend Lady Buscombe for moving my amendment in Committee and for the Minister's extremely helpful reply.
	We agree that the current system is well catered for in the Bill as drafted, and that the current situation can continue under the Bill as it is. My difficulty is that I am not at all happy with things as they are now. I would like the Bill to strengthen ICSTIS's mettle when dealing with certain current abuses. I find two such abuses particularly offensive.
	The first is scratch cards that drop out of magazines regularly with the promise of a large prize. Of course, everybody has won. You then phone a premium rate number to find out what you have won. The card states that the call will cost seven quid or whatever. Although it lists many prizes, what almost everybody has won is the right to pay more money—about ninety quid this time—to the company promoting the competition to learn more about the holiday that you might win if you pay yet more money.
	That is as close to fraud as anything. Not only is the whole business rotten, but there are glaring inadequacies in the wording that ICSTIS has permitted on the cards. First, no identifiable company or person is involved in promoting the competitions. Usually there is an accommodation but no proper name or means of contact. Secondly, no proper information is given on the chances of winning any of the other prizes or the real value of those prizes. So far as I can work out, the chance of winning the monetary prize—that is what hooks you—of £15,000, for example, is around 140 million to one, which is 10 times lower than the national lottery. But that is nowhere stated on the card. You must read the very small print of associated papers to discover that the prizes are on offer over a very long period and apply to only one card that may not have been received, let alone posted. There is no easy way of finding out who has won in the past or what their bona fides are.
	From many points of view, the business is clearly run on the basis that those funding it pay less than the person providing the service—a great deal less, because there is much wastage in the system. It is clearly a bad deal for people, but that is not disclosed. ICSTIS is allowing that to happen and intends to allow it to continue. I would like to see something stronger in the Bill to deal with it.
	My other problem is competitions promoted on radio and television in which you must ring a premium rate number for a chance to win a prize. Again, you are given no information on your chances of winning. You may have an estimation of the prize value—a Centre Court ticket for the finals at Wimbledon, or something nice—but you are not told the chances of winning, so you have no idea whether it is worthwhile shelling out a quid. Indeed, the reason that the competitions are so frequent is that it is not worthwhile. People ring in enormous numbers, and businesses can garner a great deal of money from offering such competitions on premium rate services. I do not object to the practice, but the consumer should be offered a proper level of information. Again, ICSTIS appears to have no plans to change that. I should like to see something in the Bill that focused the attention of ICSTIS on the interests of the consumer, and not for it to say that there is only a limited space on the ticket and one cannot include everything—or to say that there are some uncertainties over how many people will ring in response to a radio appeal, so that one cannot give any information. It is not acceptable that one cannot do anything because the matter is difficult. There are barriers that we have overcome in many other areas of consumer businesses—not least the education service—and I would be delighted if the Bill added an extra tooth or two to bite on the shameful laxity of ICSTIS in not dealing with these abuses of the system.

Baroness Howe of Idlicote: My Lords, I rise briefly to support the noble Lord, Lord Lucas, in the points that he has just made. The Minister might be right in the phrasing of the amendment, but could we have more detail of exactly what the circumstances are in these types of competitions? People do them once, maybe they do them more than once. If they do them once, then caveat emptor, theoretically. But, as we all know, there are some people who are rather more gambling-orientated than others.
	The matter that needs addressing, although it might not be possible in this Bill, is the extent to which one should be told the benefits up front, and who has won—if anyone. All the details should be there. At the moment, either they are not, or they are in such small print that it becomes a complete fraud. The matter is not just about things that fall out of magazines, although that does happen. Magazines such as Reader's Digest also go in for this sort of thing, which surprises and horrifies me. It would be interesting to know from the Minister whether this Bill is an appropriate place to take action, or whether there is some other way in which we can grapple with this question.

Lord Avebury: My Lords, I intend to make a long and boring speech on this matter—particularly as everybody else has said they shall make short and snappy speeches. However, it might turn out to be the other way round—that those who say that they shall make short speeches go on at great length. My speech, which starts with the opposite undertaking, will not detain your Lordships for long.
	I agree with the thought that lies behind the amendment of the noble Lord, Lord Lucas. Might the matter not be better dealt with by the use of the code? ICSTIS has just published, in draft, what it calls the Communications Bill version of the code of practice and sought comments by 16th June. That date has only just passed, so if the noble Lord sends ICSTIS a copy of his speech, it might be able to think about the matter and see whether it would be possible to cope with the kind of annoyance and sharp practice that he has outlined. He gave a specific example that is nowhere near the general grounds that he attempts to deal with in Amendment No. 69A.
	The current ICSTIS code does not mention 3G—the third generation mobile phone networks—which are likely to offer services of the kind that were described by the Minister, such as video conferencing over the Internet. That would cost much more than the £20 limit, which leads to automatic cut-off under the present code. It would be useful for the suppliers of 3G and other advanced networks to have read the comments of the Minister about the likelihood that business-to-business video conferencing would be given prior approval. They will be reassured by his reaffirmation that the code would not discourage innovation and investment in new forms of content-based communications.
	I was not certain how to interpret the Minister's comment that such a provision in the Bill would inhibit the regulator from dealing with many of the matters that are counter-productive in the present habits of some of the fringe operators in the PRS system. Incidentally, the draft code has to be approved by Ofcom, under Clause 118. Will the Minister give the earliest date that this would happen? What rules would apply to services offered by 3G networks at the moment?

Baroness Wilcox: My Lords, we welcome the Government bringing forward these amendments on premium rate services in response to our debate in Committee. I was rising to speak to my Amendment No. 70, but the noble Lord, Lord Avebury, made my case for me. I take some comfort from the Minister's comments. He has picked up on the area to which the noble Lord, Lord Avebury, referred, and to which I intended to speak. I shall not repeat that again. I shall take the opportunity to say that we support Amendment No. 69A, tabled by my noble friend Lord Lucas. We sympathise with it, and hope that the Government take it seriously.

Lord McIntosh of Haringey: My Lords, I take very seriously the points that have been raised, and I understand the comments of the noble Lord, Lord Lucas, about scratch cards and competitions promoted on radio and television—and the lack of information and identification that leads to the risk of serious exploitation. He will not be surprised if I say that his amendment would penalise many more reputable people, rather than providing a remedy for the matter that he describes. Nevertheless, he makes important points on enforcement—because that is the issue—and they deserve attention.
	The noble Lord, Lord Avebury, said that the noble Lord, Lord Lucas, should send his comments to ICSTIS. He does not need to—I shall. I shall also draw the attention of ICSTIS to the debate. In fairness to ICSTIS, some of the points that he has made are for the criminal law. They go beyond the scope of the powers of ICSTIS. Even for an independent regulator such as ICSTIS—perhaps especially for an independent regulator—it would be difficult to deal with some of the abuses without going to law.
	I agree with the noble Lord, Lord Avebury, about the fact that there are other services than video conferencing which would benefit from the prior approval regime that I have described. I agree with him that 3G is likely to be among those. I assure him that ISCTIS would deal with them by prior approval, in the same way as they would for video conferencing. He asked me about the date of approval of the code. Oftel is consulting on the conditions that might be set under Clause 117. That consultation is likely to be very brief before the code is approved, because we have been over this ground. There will be no unnecessary delay in approving the code. I agree with him and the noble Baroness, Lady Wilcox, in supporting the principles behind the amendment of the noble Lord, Lord Lucas. However, there is general agreement that these amendments and Amendment No. 70 ought not to be added to the Government amendments, the welcome for which I am grateful for.

Lord Peston: My Lords, perhaps I may interrupt the Minister before he sits down, because I am not sure that I followed his logic. He seemed to be immensely encouraging to the noble Lord, Lord Lucas, but only up to the point of saying that nothing could be done. Did I understand the Minister correctly that ISCTS could do things, but it is not doing them, and that the moment that he writes to ICSTIS it will take action? Is he saying that ICSTIS could institute the criminal law among its possible actions? I regard myself as streetwise and am used to going down Petticoat Lane and seeing the hucksters there. Unlike the example given by the noble Lord, Lord Lucas, there one ends up paying more or less the right price for the product. The whole point is to make one buy it. The point of the remarks made by the noble Lord, Lord Lucas, is that you really are being ripped off to an enormous degree. Those of us who are sitting and watching that happen are asking the usual question: "How can it be going on?" I also follow the noble Baroness, Lady Howe, in saying that people who would otherwise regard themselves as reputable are doing this. Is my noble friend the Minister confident that, without anything else happening, the relevant bodies can do something about that—or will it just go on?

Lord McIntosh of Haringey: My Lords, these things are going on, they are undesirable and ways must be found of stopping them. However, ICSTIS is developing a code that Oftel and, in future, Ofcom, will have to approve. We look to that code for protection for consumers. Although the code will not be long delayed, it is not available yet. However, there is the backstop of the criminal law, which is available to everybody.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendments Nos. 68 and 69:
	Page 111, line 28, at end insert—
	"(11A) A person falls within this subsection if—
	(a) he is the provider of an electronic communications network used for the provision of the relevant service; and
	(b) the use of that network for the provision of premium rate services, or of services that include or may include premium rate services, is authorised by an agreement subsisting between that person and either an intermediary service provider or a person who is a provider of the relevant service by virtue of subsection (10) or (11)." Page 111, line 41, at end insert "and
	"intermediary service provider" means a person who—
	(a) provides an electronic communications service used for the provision of the relevant service or an electronic communications network so used; and
	(b) is a party to an agreement with—
	(i) a provider of the relevant service falling within subsection (9)(a) to (d), or
	(ii) another intermediary service provider,
	which relates to the use of that electronic communications service or network for the provision of premium rate services, or of services that include or may include premium rate services."
	On Question, amendments agreed to.
	[Amendments Nos. 69A and 70 not moved.]

Lord McIntosh of Haringey: moved Amendments No. 71:
	Page 112, line 22, at end insert—
	"( ) OFCOM are not for those purposes to approve so much of a code as imposes an obligation as respects a premium rate service on a person who is a provider of the service by virtue only of section 117(11A) ("the relevant provider") unless they are satisfied that the obligation—
	(a) arises only if there is no one who is a provider of the service otherwise than by virtue of section 117(11A) against whom it is practicable to take action;
	(b) arises only after a notice identifying the service and setting out respects in which requirements of the code have been contravened in relation to it has been given to the relevant provider by the person responsible for enforcing the code; and
	(c) is confined to an obligation to secure that electronic communications networks provided by the relevant provider are not used for making the service available to persons who are in the United Kingdom."
	On Question, amendment agreed to.
	Clause 119 [Orders by OFCOM in the absence of a code under s.118]:

Lord McIntosh of Haringey: moved Amendment No. 72:
	Page 113, line 41, at end insert—
	"( ) An order under this section is not to impose an obligation as respects a premium rate service on a person who is a provider of the service by virtue only of section 117(11A) ("the relevant provider") unless the obligation—
	(a) arises only if there is no one who is a provider of the service otherwise than by virtue of section 117(11A) against whom it is practicable to take action;
	(b) arises only after a notice identifying the service and setting out respects in which requirements of the order have been contravened in relation to it has been given to the relevant provider by OFCOM; and
	(c) is confined to an obligation to secure that electronic communications networks provided by the relevant provider are not used for making the service available to persons who are in the United Kingdom."
	On Question, amendment agreed to.

Baroness Buscombe: moved Amendment No. 73:
	After Clause 131, insert the following new clause—
	"RESTRICTIVE COVENANTS AFFECTING FREEHOLD PROPERTY
	(1) This section applies where by virtue of a restrictive covenant, the owner of any premises is restricted, either absolutely or to any extent—
	(a) in choosing electronic communications services,
	(b) in choosing a supplier of such services, or
	(c) with respect to any other electronic communications matter.
	(2) Where this section applies, the covenant, to the extent that it restricts the owner of premises as mentioned in subsection (1)—
	(a) if it requires (expressly or otherwise) the consent of any person to be obtained before anything to which the restriction relates is done, shall have effect as if it required that consent not to be unreasonably withheld; and
	(b) in any other case, shall have effect as if it required the consent of the person entitled to the benefit of the restrictive covenant to the doing of anything to which the restriction relates not to be unreasonably withheld.
	(3) Subsections (5) to (7) of section 131 shall apply in relation to a restriction falling within subsection (2) above as those subsections apply in relation to a prohibition or restriction falling within subsection (1) or (2) of section 131.
	(4) Section 396 applies to the powers of OFCOM to make orders under this section."

Baroness Buscombe: My Lords, in speaking to the amendment, I shall also speak to Amendment No. 243.
	The new clause was debated in Committee and rejected by the Government. The Minister made a number of points at that time that merit further discussion at this stage. As I explained in Committee, the issue in general concerns many occupiers of leased and rented properties as well as many freehold property owners who are prevented from obtaining television and telephony services from the provider of their choice because of restrictions in their leases or tenancy agreements or, in the case of freehold property owners, a restricted covenant.
	The Government have to an extent recognised the problem. Clause 131 provides that a lessee's request for the lifting of any relevant restriction can be refused by the lessor only on reasonable grounds. That would seem to be an appropriate balance between the rights of lessors and lessees. As I said in Committee, however, Clause 131 does not go far enough. In particular, it does not address the issue of restricted covenants in freehold property. That is the purpose of my amendment.
	In Committee, the Minister indicated that the Government are not opposed in principle to taking an approach on freehold covenants comparable to that for leasehold agreements in Clause 131. That is a welcome statement. However, he went on to explain that the new clause and amendment could not be accepted because the Government were not convinced that any problems were being experienced, as they had not heard any evidence to that effect. In any case, he suggested, it would be improper to issue new legislative requirements on such a matter, affecting the law on property, without full consultation. I wish to press him further on those two arguments.
	First, it is my understanding from discussions with industry that a problem exists and that it can affect the installations of terrestrial aerials as well as satellite dishes. That is why the industry has asked me to press the issue. If there were no problem, I doubt that they would expend resources in trying to get it addressed. Therefore, will the Minister explain the basis on which he has become unconvinced? It does not mean that a problem does not exist simply because he is unaware of any evidence. Is that lack of awareness the only basis for the Government's position? Surely, it would be better to say simply that the Government do not know.
	That brings me on to the second issue—that of a wider consultation. Amendment No. 243 would require the Secretary of State to consult Ofcom and such other persons as appear appropriate before bringing the clause into force. The Government have argued in Committee that the need for full consultation on the substance of the issue might not fit easily with the provision. I agree that consultation on the substance is required—and the intention of the amendment is to make that possible.
	If the Government persist with their view, perhaps the Minister could provide clarification of the Government's plans to consult further on the issue, in order that they understand the extent of the problem and necessary actions as well as the views of those affected prior to any action being taken. I presume that the Minister is not going to wait until analogue switch-off to discover that freehold covenants represent a barrier to access to digital television, when it is too late to do anything about it. I beg to move.

Lord McIntosh of Haringey: My Lords, we had this amendment in Committee, and the noble Baroness, Lady Buscombe has adequately represented my response to it. I am a little surprised, because the noble Baroness has not really raised any new issues about the two difficulties that I had with the amendment.
	I said that I would need evidence that there is actually a problem. After all, a very small minority of freehold properties have covenants on them. I have explained to the House before now that I have a freehold property with a covenant on it from the early 1920s, which prohibits not only the selling but also the consumption of alcohol on the premises. Needless to say, we assured ourselves that the covenant was not enforceable before we bought the house.
	It is not up to the Government to go out searching for evidence. If Sky, or anyone else interested in dishes or aerials, has examples of difficulties that have arisen, it is up to them to come to us and we will consider what should be done.
	My second problem, which I had thought that the noble Baroness recognised, is that property law is always complicated. She, as a lawyer, should recognise that. The precise form of any change should be considered in consultation with the relevant interest groups and professional interest in property law. As I understand it, and as I remember from the Commonhold and Leasehold Reform Bill, it is a principle that normally covenants are not enforceable over freehold property. There are wider issues here, and we should not be dabbling in property law in a communications Bill any more than we should dabble in communications law in a property Bill.
	Our principle objection to the amendment is that no evidence has been produced that there is a problem, and without such evidence we find it very difficult to understand how we should embark on a piecemeal reform of property law. Those are the same points as I made in Committee, and I am unable to indicate any change in the Government's position on them.

Baroness Buscombe: My Lords, I thank the Minister for his response. I accept what he says, to some extent, about the difficulty of changing property law when addressing a communications Bill. However, a problem clearly exists. It is difficult for me to suggest to the Minister that the industry has made representations when he does not believe that has taken place.

Lord McIntosh of Haringey: My Lords, I am saying not that there were no representations, but that we have not been given adequate evidence of significant problems.

Baroness Buscombe: My Lords, I thank the Minister for his clarity on that point.
	I shall go back to the industry and put it to them that the way forward might be for them to provide the Government with the necessary examples. Clearly, I can do no more than that. I accept what the Minister said in relation to property law. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 134 [Restrictions on imposing information requirements]:

Lord Avebury: moved Amendment No. 73A:
	Page 126, line 26, at end insert—
	"(7) In a case where a requirement for information under section 132 or 133 includes a requirement for any person to answer a question, make a statement, provide an opinion or otherwise to provide information, whether orally or in writing, such answer, statement, opinion or other provision of information shall not be used by OFCOM in relation to any action to be taken against that person under any of sections 34, 38, 93, 109 or 136 without the consent in writing of that person."

Lord Avebury: My Lords, when we debated this amendment in Committee on 20th May, I withdrew it on the basis of the statement made by the noble Lord, Lord Evans, to the effect that since the Human Rights Act 1998 came fully into force on 2nd October 2000, it is no longer necessary to include an express protection for the privilege against self-incrimination in order to ensure that that privilege is properly protected.
	We believe that the Minister may have been wrong in that assertion because we are dealing here with protection against self-incrimination in relation to a civil matter, to which Article 6 of the European Convention on Human Rights does not apply. I think that the Minister's response was based on the incorrect assumption, which he repeated several times, that the Human Rights Act, which incorporated the convention into UK law, affords protection against self-incrimination in civil cases. I shall not weary noble Lords with other quotations from the noble Lord in which he made that assertion.
	We assert that where penalties are available to Ofcom—they range up to 10 per cent of relevant turnover—while they may be civil sanctions, because of their severity they are in fact akin to criminal penalties. The Government's response, as well as their response to the joint scrutiny committee, completely misses that point. In stating that as a result of the Human Rights Act it is no longer necessary to include a specific provision to ensure that the privilege is properly protected, they are plainly wrong. The penalty is a civil sanction and so no privilege is available under UK law. That is why it is necessary in the case of these civil penalties, which are potentially extremely severe and therefore equivalent to criminal penalties whose purpose is to punish, to include a specific protection in the Bill.
	In Committee I drew the attention of noble Lords to the precedent for providing such a protection in relation to civil penalties. It was contained in the draft Bill considered by a joint scrutiny committee, which then became the Financial Services and Markets Act 2000. The committee recommended the insertion of a provision, which became Section 174(2) of that Act, preventing the use of compulsory statements obtained under Section 123 as a result of which civil penalties might be imposed for market abuse.
	The circumstances here are directly comparable, in that the Financial Services Authority has—as this Bill proposes that Ofcom should have—the power to impose such significant penalties. So Parliament did accept the principle that, in such circumstances, protection should be provided against self-incrimination analogous to Article 6 of the convention. In saying that it is not necessary to put anything in the Bill because the protection already exists, the Government imply that they accept that it is right for such a protection to exist, in which case they ought to be sympathetic to the amendment. I beg to move.

Lord Evans of Temple Guiting: My Lords, it is clear that there is a disagreement between the Government and the noble Lord, Lord Avebury; not a disagreement between us personally, but on the legal advice that we have received. I ought to make it clear that the relevant protections relating to self-incrimination relate to criminal proceedings. The extent to which, for example, enforcement action against an operator for breach of a condition of entitlement under Part 2 may be regarded as a criminal matter from the human rights perspective remains to be clarified by case law. So in applying these provisions, Ofcom, like any other enforcement agency, will have to act in accordance with the law as it evolves.
	However, having made those comments, because of the matter of our disagreement, I shall take away the points made by the noble Lord, Lord Avebury, read the detail in Hansard and come back to him. It is clear that this matter must be resolved. We are determined to do that when we return to the Bill next week. I thank the noble Lord.

Lord Avebury: My Lords, the Minister has been extremely helpful because, as he says, there must be a disagreement between the legal advice that is available to the Government and that which has been offered to us. We hope that this issue can be resolved by discussion before we reach the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 153 [Directions with respect to the radio spectrum]:

Lord Avebury: moved Amendment No. 73B:
	Page 141, line 33, leave out "3A" and insert "3"

Lord Avebury: My Lords, this amendment and those grouped with it relate to recognised spectrum access, a subject which we covered in some detail in Committee. Noble Lords will recall that the Government did not accept our argument that the cost of RSA would be passed on to consumers.
	The satellite operators say that they are already using the spectrum as efficiently as it is possible to do and that there is no scope for efficiency savings to be made upon the introduction of RSA. Therefore the additional cost burden that RSA is bound to generate will necessarily have to be passed on to the users of the satellite platform and, ultimately, to the consumers of the services.
	As was pointed out in Committee, the operators also say that RSA may compromise the take-up of digital television and, as a result, the Government's switchover target. I am bound to accept that the advice from the operators of the satellite services is of some significance in this regard. If the technical advice they are giving asserts that the adoption of these technologies will be delayed, they are in the best position to know and, with respect, I think that their opinion ought to prevail over that of the Government's advisers. At any rate, if the matter remains unresolved in the discussions between the industry and the Government, we can say that there has been a gap in communications between the two which needs to be closed during the Report stage of the Bill, rather than to allow the subject to be left unsolved and to take its place on the statute book.
	In pursuing the arguments put by the satellite industry, we also assert that recognised spectrum access is likely to stifle emerging broadband services, which require a greater use of spectrum than does broadcasting. The application of RSA will constitute a significant and damaging disincentive to innovation and the development of new broadband satellite services. Again, this is likely to affect disproportionately rural consumers, about whom we heard on the last occasion during the discussion on the amendment moved by the noble Earl, Lord Northesk. It may also reduce competitiveness in the broadband market by making the further development of broadband interactive satellite services prohibitively expensive. So it will certainly compromise the Government's objective of having in place the most competitive and extensive broadband market in the G7 by 2005.
	I ask the Government to think again about the whole question of recognised spectrum access. If they cannot accept these amendments, I hope that they will say that they are at the least open to further discussions before this extensive provision is included in the Bill without any additional consideration. I beg to move.

Baroness Buscombe: My Lords, I shall not even attempt to say that I will be brief on this matter. Recognised spectrum access is a very important area. We had a considerable debate in Committee and I return to that discussion with our Amendments Nos. 74 to 99.
	I am grateful to the Minister for the time that he has put into addressing the concerns I have raised. Moreover, I received a detailed letter, for which I am grateful. However, I am still unhappy that the Government have failed to provide sufficiently clear answers to these concerns. I now return to the issues to seek further clarification.
	I shall start with the question of consultation, and my Amendment No. 74. RSAs are of huge concern to the satellite industry. If nothing else, the level of representations received, and the amount of time given over to this subject in debates in this Chamber and another place, stand testament to that. As the Minister also indicated in his letter to me, the majority of responses to last year's consultation were from organisations against RSA. I believe that it is vitally important for them at least to be clear that their concerns are to be taken into account, and are seen to be taken into account, in the implementation of this new system.
	I do not think that the Government's reassurances on this matter have been convincing. As we have discussed previously, Clause 156 does, indeed, refer to Clause 396, which includes a requirement to consult and take account of the representations received. But Clause 396 relates only to Ofcom's powers to make regulations, orders and schemes, requiring consultation on these prior to their being put to Parliament—a "statutory longstop", as the Minister puts it in his letter. This is rather late in the day, however, and the real concern remains that there is an absence of any provision for extensive and detailed consultation on fundamental RSA principles, which should take place well before any statutory instruments come to be drawn up.
	I should like to take a moment to contrast the Government's position on my proposal for consultation here and that which they took on the proposal for consultation on the implementation of my proposed new clause on restrictive covenants affecting freehold. There I proposed an amendment which would have required consultation before the bringing into force of the provisions of the new clause. In rejecting the new clause and amendment, the Minister replied that there is a difference between consulting on the substance of a provision and consulting on bringing into force a provision that has already been made. That is precisely the point that I am putting to the Minister today, yet, unfortunately, he appears not to accept its validity. Perhaps the Minister could explain this difference in approach, or preferably accept my amendment for the purposes of consistency.
	Furthermore, the duty to carry out and consult on impact assessments under Clause 7 is entirely down to Ofcom's own discretion on what is important and, as we previously discussed, the better regulation principles may—unless the Minister changes his mind, and I am hopeful that he will—unfortunately be disregarded by Ofcom, also whenever it chooses to do so.
	These are concerns that rest heavy with the industry. What the industry wants is a clear and guaranteed opportunity to make its concerns heard at an appropriate and timely stage of the decision-making process, not a vague commitment to consult at the convenience of the regulator which could in theory decide not to consult at all until the eleventh hour.
	Moving on to a more positive outcome from our discussions I should like to thank the Minister for his expression of personal sympathy with the arguments that I put forward in favour of "grandfathering" the RSA proposals to pre-existing satellite transponder agreements which have not factored in the possibility of RSA. It is—as I think he acknowledges—important not to discriminate in providing such protection to terrestrial broadcasters' licensing agreements and satellite transponder agreements. I should like to press him a little further on that, however, and in particular on the difference between his personal views and his views as the Minister responsible for broadcasting.
	In his letter he indicates that the timing of the introduction of charges for RSA will be a matter for Ofcom to judge. Yet, as I indicated in Committee, in the Government's own response to the review of radio spectrum management they indicated that spectrum trading and pricing as regards terrestrial broadcasters is not to take effect while they have existing licences which did not anticipate such pricing. If the Government are able to make such a clear policy statement as regards terrestrial frequencies, I should like to ask the Minister what is stopping him now from making an equivalent policy statement today on satellite transponder agreements rather than simply expressing a personal view.
	I should like now to turn to Clause 158(3), which provides for the auctioning of RSAs, and my Amendment No. 85, which seeks to delete this provision. As I argued in Committee, while it makes sense to auction an actual scarce frequency, it does not make sense to auction an RSA, which is merely protection against a particular terrestrial frequency being deployed to create interference. Surely if there is a risk of interference to a number of satellite broadcasters from the deployment of a terrestrial fixed link, all of them should be able to obtain protection against interference and not just one.
	I put a number of questions on that issue to the Minister in Committee. How, for example, will the winner of the auction ensure that those who did not bid do not benefit from the protection which RSA granted to him provides? What happens to the loser who was prepared to pay but valued the protection less highly? Does he have to do without the protection? Unfortunately, the Minister appeared unwilling to engage in debate on these difficult questions in Committee and has not attempted to answer them in the letter either. Instead the arguments in favour of auctioning remain simplistic and generalised; that there is widespread support in principle both for auctions and for spectrum pricing, and charging makes the use of spectrum more efficient. Support in principle is all very well but auctioning is quite inappropriate in the case of RSAs.
	I am afraid that I must ask the Minister again, therefore, if he will take this opportunity to outline the circumstances where an auction of RSA would be appropriate, and how it would be unaffected by the considerable flaws I have already outlined. As the Minister observed in Committee, Amendments Nos. 75 to 84 and 86 to 98 all relate to the way in which Ofcom will grant and regulate RSA. This is, I believe, an important and legitimate source of concern for those who stand to be regulated in this way. The Government should not simply dismiss it as predictable special pleading on the part of commercial operators. First, I believe there are outstanding questions to be answered in relation to Ofcom's ability to impose wide-ranging conditions on an RSA under Clause 156(5), for example, on the signal or what is broadcast on it.
	The Minister indicated in his response in Committee that there may be a need to impose technical terms and conditions, for example, standards that equipment should meet,
	"to obtain a desired quality of service, or to deal with extraneous symptoms that may be received, or to deal with restrictions on the frequency limits or on geographical boundaries".—[Official Report, 20/5/03; col. 750.]
	He has also added in his subsequent letter that,
	"It may be considered desirable to limit the uses to which spectrum benefiting from RSA may be put in a particular frequency band, for example in the interests of promoting a particular service such as broadband".
	I remain concerned at this clear broadening of the policy intention behind RSA, which my Amendment No. 75 seeks to address. The purpose of RSA is to protect the holder against interference to his satellite signal—nothing more. Surely, therefore, it runs wholly counter to this rationale that positive conditions are imposed on the RSA holder relating to his signal or what he broadcasts on it. The Minister has said that the provisions are needed to manage the spectrum but this should only mean providing protection against terrestrial interference. Other policy objectives such as the promotion of one particular type of service over another should not form part of the RSA rationale.
	On a related matter, Clause 161 allows Ofcom to limit spectrum use by specifying frequencies for which it will grant or make available only a limited number of RSAs or specifying uses for which on specified frequencies Ofcom will grant or make available only a limited number of RSAs.
	Amendments Nos. 86 to 91 seek to address the concern that in effect these provisions enable Ofcom to ration the protection which is to be afforded by RSA and to impose restrictions on the use of satellite frequencies which are already subject to international co-ordination and agreement. If RSAs are to be made available, they must be available to all satellite operators and broadcasters. After all, RSAs are simply intended to enable satellite broadcasters to guard against terrestrial interference. Therefore, the number of RSAs granted should be determined wholly by the demand for them and nothing else. This is clearly not the Government's intention, however. Instead they regard RSA as a tool with which to shape the use of satellite spectrum rather than a simple protection from interference. As the Minister explained in Committee:
	"Radio spectrum is a scarce resource. In some frequency bands, the need to protect one service from interference can constrain the deployment of other services in bands shared by satellite downlinks and terrestrial point-to-point fixed links. It is necessary to limit the grant of RSA, to prevent other services from being unduly restricted".—[Official Report, 20/5/03; col. 750.]
	I move on to Ofcom's powers to revoke the grant of an RSA or modify the restrictions or conditions to which a grant is subject. In particular, I remain concerned that there is no constraint on the grounds on which Ofcom may modify or revoke a grant, other than when it includes in an RSA the self-denying ordinances in paragraph 7 of Schedule 5.
	In his letter, the Minister argued that it may be necessary through modification or revocation to re-farm spectrum to make room for a new service. He said that RSA holders,
	"will have a considerable degree of security in relation to revocation or modification",
	in that they will have a right of appeal and that Ofcom will be required to act reasonably and give an appropriate period of notice, depending on certain circumstances. It is difficult to see how any holder of an RSA would feel secure in the light of such weak assurances. The Minister has already indicated that he believes it reasonable for a licence to be revoked in certain circumstances, so I cannot imagine that Ofcom will find it too difficult to negotiate that particular hurdle. A longer period of notice is unlikely to sweeten the pill.
	I believe that it is contrary to the legitimate rights of an RSA holder for Ofcom to have such unfettered power to amend or remove, albeit after the RSA holder has been able to make representations, an RSA during the period for which it has been granted. What is the value of an RSA that in theory protects against the possibility of signal interference, while at the same time provides a mechanism for greater regulatory intervention that would allow the protection to be withdrawn at the behest of Ofcom? Once granted, RSAs should not be revocable and should last their full term. Amendments Nos. 76 to 84 seek to ensure that that is the case.
	Finally, I should like to address the issue of spectrum trading. My concern remains that Clause 165 would allow Ofcom to alter the conditions of an RSA, and require further payments to be made or financial security to be given, before giving its consent to any transfer. Such provisions could alter fundamentally the rights and values of the RSA originally granted, and are inconsistent with the underlying principles of property and human rights. The effect is that, on a sub-licensing of transponder capacity, it may not be possible to transfer any associated RSA protection. That will create problems for secondary trading in transponder capacity. As noted in Committee, the European Commission has been keen to see that flourish.
	We believe that the Government have failed to justify the provisions. In Committee, they said that the amendments would be "unhelpful", without giving any reasons other than that they would dilute Ofcom's powers. The Minister's letter goes a little further, indicating that transfers of RSA could lead to "undesirable outcomes" and raise issues of,
	"competition or compliance with international obligations".
	However, it again fails to expand on those policy reasons.
	With such significant powers of intervention handed to Ofcom on the matter, I urge the Government to be more forthcoming in their explanations. If they are unable to do so, I urge them to accept Amendments Nos. 92 to 99. They would not remove RSAs from the trading provisions, but would reduce significantly the ability of Ofcom to alter conditions requiring further payment or require its consent to be given.

Lord McIntosh of Haringey: My Lords, I also have a very long speech. I shall have to give the parts of it that refer to the amendments that have been spoken to. Fortunately, a number of amendments in the group have not been spoken to at all. I hope that the House will be glad to hear that I do not think it necessary for me to respond to them. I am glad that I was able to write to the noble Baroness, Lady Buscombe, and the noble Lord, Lord Avebury, and to place my letter in the Printed Paper Office and the Libraries of both Houses.
	I realise that the noble Lord, Lord Avebury, has more general concerns such as the belief of some people in the industry, although by no means everyone, that RSA could compromise switchover or stifle emerging broadband. Those are general complaints about recognised spectrum access, and I do not think that I am in a position to do anything other than respond to the amendments in the Marshalled List. If he wants to discuss the wider issues, of course I am always happy to do so.
	The principle of RSA has already been extensively discussed. The powers in the Bill are broad enabling powers. It is up to Ofcom to decide in which frequency band RSA should apply, the timing of its introduction and the level of charges. Decisions on that have not been made yet.
	Before I go into the individual amendments, I should tell the noble Baroness, Lady Buscombe, that I listened closely to what she said and have some sympathy with her arguments on Amendments Nos. 75 and 76. I am happy to look again at the scope of Ofcom's powers on the restrictions and conditions to which the grant of RSA can be made subject. I want to see whether we can table an amendment at Third Reading to narrow those restrictions and conditions without compromising the effective management of the radio spectrum.
	Auctions are referred to in Amendments Nos. 73B, 73C and 85 and in the linked Amendment No. 226A, which would prevent Ofcom from charging fees for RSA in excess of its costs. The underlying thought seems to be that it is wrong to charge for RSA on the same basis as licences. That is what the Trade and Industry Committee of the House of Commons said, and we have already published our response to that which goes into the issue in some detail.
	Businesses such as Sky that currently benefit from satellite's free access to spectrum in frequency bands shared with terrestrial services are concerned about the prospect of paying for their use of that valuable resource. Understandably, they would rather pay nothing at all or limit their payment to cover Ofcom's costs. We have repeatedly said that we have included strong and effective safeguards in the Bill to meet those concerns about the level of fees. The amendments, which would limit the fees to costs recovery, go too far. They would deprive Ofcom of an effective spectrum management tool and perpetuate the present inequity in some frequency bands. But terrestrial users pay a fair price for spectrum, whereas satellite operators do not. That does not seem to me to be a defensible stance.
	I am trying not to make points that are unnecessary in the light of the debate, but in dealing with the issue of auctions and pricing I have to say that I valued the principled position taken by the Conservative Party in debates on the Wireless Telegraphy Act 1998. It said that the spectrum pricing principles should be extended to satellite. That is what we are doing in the Bill. The amendments would depart from that principle, and I really do not understand why the Opposition wish to depart from it now. There is no basis for distinguishing between RSA and licences in respect of administrative incentive pricing or auctions.
	By "administrative incentive pricing" I mean setting fees in accordance with spectrum management considerations, having regard to factors such as congestion which are specified in Clause 151(2) rather than by reference to the cost of managing the spectrum. These fees are levied to promote a more efficient use of the radio spectrum, not to maximise revenue. It is important to be clear on that point. Both the RSA and licences give the holder access to a specified quantum of spectrum of a defined quality, and the charging principles are exactly the same.
	The noble Baroness, Lady Buscombe, said in Committee that RSA should not be auctioned because it is "merely protection". Indeed, the Trade and Industry Select Committee went further and called it a protection racket. This is of the essence. Permission to transmit is of little value unless there is the facility to receive free from interference. That facility underpins the value of spectrum of a communications medium. What the noble Baroness describes as "merely protection" is as valuable as a licence, and should, in fairness, be charged for on the same basis. Indeed, the Trade and Industry Committee endorsed those principles for spectrum licences.
	In the end, decisions on auctions for RSA will be a matter for Ofcom. I cannot anticipate how Ofcom will use the auctions, but it will be required to act in accordance with the spectrum duty in Clause 151, taking account in particular of spectrum management considerations, and it will consult, as required by Clause 396. I appreciate the concern expressed by satellite operators about the level of fees. I am happy to repeat the assurance that RSA charges will be no higher than necessary for spectrum management purposes. Clause 151 gives that assurance statutory force.
	Amendment No. 74 would require Ofcom to consult all interested parties before making regulations to apply RSA and to consider whether they are appropriate and proportionate. I have no problem with the principle behind the amendment and we have given repeated assurances that there will be full and detailed consultation before decisions are reached. But the amendment is not necessary, because Ofcom's general duty is to regulate in a way that is proportionate and appropriate. That will apply to RSA as to other aspects of Ofcom's functions. We do not need to repeat that requirement specifically for RSA.
	There are provisions in the Bill requiring Ofcom to consult before introducing RSA. Clause 76(6) requires Ofcom to consult about major regulatory changes or changes with a significant impact. Clause 396 requires Ofcom to consult and take representations into account before making RSA regulations. There is nothing to prevent Ofcom from consulting more extensively if it wants to do so. The framework for consultation applies to, and is sufficient for, other Ofcom regulations. There is no need to have a special regime for RSA.
	I have referred to our sympathy for Amendments Nos. 75 and 76. It is not possible to anticipate exactly what restrictions or conditions Ofcom may need to impose. It is prudent to give Ofcom similar flexibility as for licences. RSA could be for a wide range of services, not just satellite. Restrictions and conditions will have to be tailored to the circumstances, so we need to give Ofcom a margin of flexibility, for example—and this comes back to the point made by the noble Lord, Lord Avebury—to promote broadband by restricting the services that benefit from RSA, or to impose conditions on sharing spectrum in the interests of spectrum efficiency.
	In exercising this power, Ofcom will be bound by Clause 3 to have regard to the principle of good regulation, and by Clause 6 not to impose unnecessary burdens. However, we will look again at the scope of the powers to see if we can narrow them. I hope that that will give some reassurance to the noble Baroness, Lady Buscombe.
	The noble Baroness referred to the issue of revocation and modification, which is in Amendments Nos. 74 to 77. The amendments would limit the circumstances in which Ofcom may revoke or modify RSA to cases in which the holder has consented or there has been a contravention or restriction of the condition of the grant. This is too inflexible; Ofcom may need to revoke or modify RSA for a number of reasons. It may be in the best interests of consumers to free up spectrum that is subject to RSA for a new service to be established.
	The amendment would not allow Ofcom to use the accelerated procedure in subsection (6) in urgent cases including those involving a serious threat to public safety, public health or national security. We must make provision for such a threat, should it arise, and for Ofcom to act swiftly. For example, in the terms of RSA, reserving frequencies for holders' exclusive use could prevent spectrum being made available for some application needed urgently to counter a serious threat. We need to have the power to act quickly.
	Amendments Nos. 86 to 91 would remove references to RSA from Clause 161. That requires Ofcom, in imposing limitations on the use of particular frequencies, to make an order. It is difficult to predict exactly how the order could be used, but one can see in general terms why it is needed.
	The noble Baroness, Lady Buscombe, acknowledged that radio spectrum is a scarce resource. In some frequency bands there is a need to protect one service from interference that can constrain the deployment of other services, for example, in bands shared by satellite links and terrestrial point-to-point fixed links. If we grant RSA and a shared band, that effectively reduces the spectrum available for other applications. In these circumstances, it is necessary to limit the grant of RSA to prevent other services from being unduly constrained to the detriment of the economy and of consumers.
	Amendments Nos. 94 to 99 are about trading. They would prevent Ofcom from restricting the circumstances or manner of trading and imposing conditions. Amendment No. 99 would remove the sanction in subsection (4) that underpins Ofcom's regulation of trading of RSA. Transfers of RSA will give rise to similar considerations and similar regulations as transfers of licences. Ofcom will therefore need similar powers.
	We cannot anticipate what use they will make of the powers in Clause 165, but they will be required by Clauses 3, 6 and 151 to be proportionate, appropriate and in accordance with the general principles of administrative law to act reasonably. They will be required to consult before making orders, and there will be rights of appeal against their orders.
	I am sorry to have gone on so long, but this is a complicated group of amendments. I hope that I have given answers that address the problems raised by these amendments.

Baroness Buscombe: My Lords, I thank the Minister for his comprehensive and thorough response. These are complicated issues, but they are tremendously important. I am grateful that the noble Lord has taken the time that is necessary to respond to the concerns that I have raised today. I do not want to detain your Lordships' House. There is much to consider, and I want to re-read what the Minister said in Hansard. I extend my grateful thanks for his agreement to reconsider the scope of Ofcom's powers, which addressed our concerns expressed in Amendments No. 75 and 76. I beg leave to withdraw the amendment.

Lord Avebury: My Lords, the noble Baroness was in fact intervening before the Minister concluded. I moved the amendment and the noble Baroness was speaking to it. It is unfortunate that although the vast majority of amendments in this grouping were in the name of the noble Baroness, I must withdraw the amendment, which I will be happy to do in a moment.
	The Minister made only one concession in his lengthy exposition, although that was quite useful. He acknowledged that the unfettered power to impose restrictions on the grants of RSA might need to be modified and that he might come back to noble Lords with suggestions that would replace those that the noble Baroness made in Amendments Nos. 75 and 76. That concession was useful.
	The whole complicated question of RSA has not been thoroughly explored. Part of the reason for that involves the nature of the process that we undergo between successive stages of the Bill. I went into the Library to ask for copies of all of the letters that the Minister had sent to various speakers on different amendments. They threw up their hands in horror and said that no fewer than 60 such letters had been lodged in the Library and, presumably, in the Printed Paper Office. The problem is that the advisers helping us with the amendments do not necessarily see those letters because, unless we remember to send them out—

Lord McIntosh of Haringey: My Lords, that is the noble Lord's job.

Lord Avebury: My Lords, the noble Lord says that but he has vast resources in his department. Unfortunately, I have only me. People sometimes ring me up and say, "Could I speak to Lord Avebury's private secretary or his research assistant?", and I always have to tell them that that there is me and no one else.
	With great respect, there is another solution to this matter, which is of more general interest than simply the amendment. Is there any reason why important letters such as the one that the noble Lord sent us about RSA—which was put in the Printed Paper Office and the Libraries of the two Houses—should not be put on the department's website? I am glad to see the noble Lord nodding at that suggestion. That would enable people in the industry to see what was happening in discussions between the Government and noble Lords, and it would help them to advise us more cogently between Committee and Report stages.

Lord McIntosh of Haringey: My Lords, there is no reason at all why that should not go on the website. However, I can make a suggestion that is perhaps rather unorthodox: the noble Lord could tell us who his advisers are and we will send them copies of the letters.

Lord Avebury: My Lords, that might be almost as much trouble as making copies and sending them out. We do not always know who in the industry would benefit from knowing what the noble Lord said in a lengthy five-page letter about the various aspects of RSA that we discussed in Committee. I leave that thought with the Minister.
	After discussions between the noble Baroness, Lady Buscombe, and ourselves, there may be some issues to which we may wish to return at a later stage. On that understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 73C not moved.]
	Clause 156 [Grant of recognised spectrum access]:
	[Amendments Nos. 74 and 75 not moved.]
	Schedule 5 [Procedure for grants of recognised spectrum access]:
	[Amendments Nos. 76 to 84 not moved.]
	Clause 158 [Charges in respect of grants of recognised spectrum access]:
	[Amendment No. 85 not moved.]
	Clause 159 [Conversion into and from wireless telegraphy licences]:
	[Amendment No. 85A not moved.]
	Clause 161 [Limitations on authorised spectrum use]:
	[Amendments Nos. 86 to 91 not moved.]
	Clause 165 [Spectrum trading]:
	[Amendments Nos. 92 to 99 not moved.]
	Clause 195 [Functions of OFCOM in relation to the BBC]:

Lord Gordon of Strathblane: moved Amendment No. 100:
	Page 175, line 11, leave out from "OFCOM" to end of line 15 and insert—
	"(a) to approve or amend all BBC Statements of Programme Policy and to satisfy themselves that the Governors of the BBC have ensured adherence to them;
	(b) to advise the Secretary of State as to whether the BBC should be permitted to introduce new television or radio services, alter the character of existing services or cease to provide them;
	(c) to satisfy themselves that the BBC has followed best practice in its expenditure of funds raised by the licence fee and from other sources;
	(d) to ensure that any cross promotion by the BBC does not unduly distort any market; and
	(e) "

Lord Gordon of Strathblane: My Lords, this subject was raised in Committee, albeit at a very late hour, on 20th May. I am sure that noble Lords will be grateful to me at least for being brief on this matter tonight and for giving my argument in bullet-point form rather than rehearsing the whole issue.
	If we are to have a Bill which brings together broadcasting and telecommunications, it would appear to the man on the street somewhat strange to leave out the principal player in both television and radio. For that reason, I believe that the onus is firmly on the Government to prove that it is a good idea rather than for people such as me to prove our side of the case.
	My argument is, first, that having the BBC fully under Ofcom would improve the public service broadcasting regulatory role of Ofcom. It would strengthen that aspect of Ofcom against the simple competition regulation. I suspect that many noble Lords will at least agree with that point, although I suspect that they will disagree with some other points that I make.
	Another point is that if the BBC does not come under Ofcom, there is the danger of a rival regulator in the key area of subjective assessment where the public service broadcasting objectives are being discharged. There is a danger of conflict and chaos, and that will strengthen the argument of people who say, "This regulation is just chaotic. Leave it to the market because they can't make up their own minds whether it is a good idea or a bad one". An independent producer could take a programme to the BBC, which the BBC screens and regards as acceptable. It might then transpire that Ofcom had ruled it unacceptable in the independent sector, or vice versa. That does not make sense.
	My other argument for putting the BBC under Ofcom is not that that would take power away from the BBC governors; it would impose a buffer authority between the BBC governors and the Secretary of State. I shall not quote it in full but noble Lords may recall that on Second Reading I quoted the somewhat disingenuous brief from the DCMS saying that this is being fair to all in that it puts everyone on the same footing, where everyone is self-regulatory, at tier 3.
	As the Secretary of State pointed out, the fact is that if the independent sector does not live up to its obligations, Ofcom can intervene. But the Secretary of State went on to insist that if the BBC does not live up to its obligations, we want politicians to intervene. I do not like politicians interfering in broadcasting; I like the British tradition of buffer authorities. I believe that the BBC is better off with a buffer authority between it and a Secretary of State rather than a Secretary of State being the judge on matters of impartiality and everything else and where, frankly, he is frequently parti pris.
	The third argument is: in future, how can a Secretary of State decide whether the BBC should introduce new services if he cannot be given advice from a single source on what the broadcasting ecology is looking like at that moment? If the BBC remains outside Ofcom, presumably it will have to turn to the DCMS for advice on the BBC and to Ofcom for advice on everything else. Advice is required from a single source looking at the whole broadcasting landscape.
	I address my third point, in particular, to my noble friend Lord Sheldon, who spoke eloquently and passionately about the role of the BBC governors. I concede that there have been great governors of the BBC. I simply remind them that they are human beings appointed by politicians, as is the board of Ofcom. If politicians can get the appointment of governors of the BBC right, the assumption must be that they will get right the appointment of the board of Ofcom.

Lord Sheldon: My Lords, which would my noble friend sooner be—a governor of the BBC or on the board of Ofcom? I do not believe there is any doubt that any Member of this House would say that being a governor is a great position to hold, with its long tradition and its great certainties during the long period that the post is occupied. Does it compare with being on the board of Ofcom?

Lord Gordon of Strathblane: My Lords, once Ofcom is up and running, I would argue that the answer is yes. But, in the light of his remarks in Committee, I should have expected my noble friend to make that point, and I understand where he is coming from on it.
	However, I think so highly of the BBC governors that I would give them the whole thing. Why bother with Ofcom? Let us simply put the whole lot under the BBC governors. I suspect that noble Lords will say, "Hold on, but they run the BBC. They would be partial". That is not the theory. The theory is that they are not partial to the BBC but are wholly independent public regulators. It is precisely that duality of role that, in my view, creates an unresolvable conflict for a governor of the BBC—one which has been addressed in White Paper after White Paper. How can the top board of a company somehow be independent of that company and stand back in the public interest? I shall not stand back too far in case I topple over.
	It is very easy to convince oneself, as politicians do regularly, to do the popular thing before an election on the basis that only if one is in power will one do good. Similarly, the governors of the BBC will decide to make more popular programmes, because as long as they have the licence fee they can continue to provide public service broadcasting. Meanwhile, they go further down the slippery slope, competing against what is—regrettably—increasingly tawdry competition from more and more television channels; and standards continue to fall.
	In passing, if the BBC governors are not the top board of the corporation, who are its non-executive directors? What would Mr Higgs have to say about a body with a turnover of £2.5 billion a year, with no non-executive directors at the top? Of course the BBC governors are the top board of the BBC. However, it is very difficult to exercise both roles at once.
	The arguments in favour of putting the BBC wholly under Ofcom are conclusive. If we do not do that, we will subject ourselves to two lots of debates each time: parallel debates about Ofcom and the BBC. If noble Lords want to subject themselves to two lots of debates rather than one, by all means keep the BBC outside and presumably we will have these arguments about the BBC as little as one year ahead of the same arguments about Ofcom. It is much more sensible, and much better for both organisations to have the BBC inside from the beginning.

Lord Lipsey: My Lords, although I see the force of the arguments made by my noble friend Lord Gordon, which we discussed for many hours during the Davis inquiry, I think that this is really best considered at Charter renewal, when we can look at the whole spectrum of considerations on the BBC, rather than taken in isolation on this occasion.
	My noble friend wants one giant leap, but I want one nudge before then. It is set out in Amendment No. 112; namely that Ofcom should have powers to follow up the BBC's fair trading rules—not the rules themselves, but their implementation in practice.
	I moved that amendment in Committee. Indeed, when the first Marshalled List came out, my heart gave a mighty leap, because I found that conjoined with my name was that of the noble Lord, Lord McNally, who when I first moved this had been rather critical of it. However, his name has since disappeared and been replaced by a name of equal quality—that of the noble Baroness, Lady Buscombe. I have not got the ally—indeed, the convert—I originally had, but the argument is as powerful as it ever was.
	The basic divide—and why this should be done now—is as to when the BBC is under Ofcom and when it is not; namely, whether it is engaging in commercial or public service activities. Public service is outwith Ofcom, in the province of the governors; commercial activity falls under Ofcom's competition responsibilities. Therefore, it seems perfectly sensible that when the fair trading obligations are to be monitored, Ofcom should play a powerful role. I said that at Committee stage.
	The amendment is down again today because the noble Lord, Lord McNally, made a much better job of finding problems with it than did the Minister, who gave what I can only describe as a perfunctory and ill-informed reply. We have a different Minister this evening, so I hope for better.
	The Minister then referred to the Whish report, not knowing that Professor Whish was actually debarred by his terms of reference from considering what this amendment covers, and what Ministers were exciting him in support of. The Government seemed blissfully happy to allow the BBC to act as referee in the matter, when it is also a player on the field—a principle which rarely applies with great effect in public life.
	I hope that the Minister will expand on this. There is an area of doubt in my mind—and for all I know many other noble Lords' minds—and in the minds of those who have to run Ofcom. How strong and far-reaching are the powers of Ofcom with regard to competition law? If they are strong and far-reaching, the amendment may be otiose. It follows from those powers that if in practice the BBC breaks its trading obligations Ofcom can intervene. However, if, as others think, the powers are somewhat weak, then it is not so placed and we are left with the Government refereeing and playing simultaneously—and these days the BBC plays pretty hard and one needs, therefore, a strong referee to keep it under control.
	It is a clear and simple case. I hope that we receive a strong and more considered ministerial response than previously; otherwise the temptation to divide the House will be powerful if not irresistible.

Lord Sheldon: My Lords, I speak to Amendments Nos. 104A, 105A and 105B in the names of the noble Lord, Lord Barnett, and myself.
	Amendment No. 105A relates to subsection (3), which gives powers to Ofcom to regulate BBC services and impose penalties in respect of contraventions of those regulations. Subsection (5) proposes penalties of £250,000. I find that astonishing. We are threatening to fine the BBC as though it were a bunch of crooks. To my mind, it is the greatest public service that we have seen in the past 100 years. To start dealing with it in this way is an insult.
	The purpose of the amendment is to make people realise what the Bill proposes. The governors have to submit to Ofcom's views. As I said in an intervention, would any of us prefer to be on Ofcom rather than a BBC governor? I should not have thought that that was so for the majority of the Members of this House. They would be subordinate to Ofcom's views. These are people of principle and standing; they are people of great merit. I refer to the noble Lord, Lord Hussey, my noble friend Lord Barnett and the noble Baroness, Lady Hogg. In the past, there have been many other great people. It is proposed that Ofcom will decide what they should be doing rather than those who have at heart the public interest. We do not know who the members of the Ofcom board will be. But we do know the standing of the governors of the BBC. That is a most important aspect.
	The suggested penalties are ludicrous. It is a matter we shall need to deal with. We should be chastising not the BBC, but the way in which some of these matters are dealt with. Ofcom has a very distinguished chairman but I do not think that it will have the same level of distinction among the ordinary members of the board.
	Over the past many years, the standards of public service broadcasting have undoubtedly been set by the BBC. It has had an enormous effect on the whole of public service broadcasting. If any of the other channels or stations deviate too strongly, the comparison is made. Others cannot stray too far. That has had an effect on the broadcasting system in this country.
	Regulations can provide a number of loopholes. The United States is a good example. In the United States people are exploiting all kinds of loopholes in a way that I hope we shall not see in this country.
	Amendment No. 111 deals with the National Audit Office. I am considering its effectiveness. What does the National Audit Office do?

Lord McIntosh of Haringey: My Lords, if my noble friend Lord Sheldon, will forgive me, Amendment No. 111 is not in this group of amendments.

Lord Sheldon: My Lords, I thank my noble friend for pointing that out. I shall speak to those other matters later.
	There are those who feel that the principled actions of the BBC and the way in which it operates curtail its opportunities in this area. Of course, the BBC has been the great defender of our standards. It has earned the envy of many countries and many broadcasting systems in the world and the appreciation and gratitude of many others. I look forward to seeing some qualitative contribution from my noble friend who is to respond on such matters and I look forward to a considered reply in answer to my points.

Lord McNally: My Lords, as ever, it is a great pleasure to follow the noble Lord, Lord Sheldon, on these matters. He has a vast experience of public service and public sector management. In an earlier debate I mentioned that this morning I had the great pleasure of listening to Pat Mitchell, the president and chief executive officer of Public Broadcast Service (PBS) in the United States. I came away renewed in my determination that in our deliberations on this Bill we should ensure that the great tradition of public service broadcasting, of which the BBC is the iron pole, should be retained when our deliberations are over.
	I cannot support the amendment tabled by the noble Lord, Lord Gordon. I am not as worried as he appears to be about rival regulators. There may have been a time when there was genuine concern about piling such a wide range of responsibilities on a single regulator, particularly when the regulator on whom one is to pile the responsibilities is as yet totally untried. As many people say, we have a great national asset, a world asset, in the BBC. It is one of the strongest brand names in the world. It seems to me to be extraordinary that with such an asset we should contemplate moving it lock, stock and barrel to a regulator whose prime responsibility is not the defence of public service broadcasting but regulation of a commercial sector. The main merits of those chosen for Ofcom are their understanding and skills in managing and regulating a private sector.

Lord Gordon of Strathblane: My Lords, I thank the noble Lord for giving way. In the light of that, does he agree that if the BBC is ever to come under Ofcom, it is much better for it to come under Ofcom at the beginning rather than later on?

Lord McNally: My Lords, quite the contrary. I want to see some performance from Ofcom. I shall need much persuading when we come to charter review. I tend to agree with the noble Lord, Lord Sheldon, that from time to time the governors come in for a fair amount of criticism, but for over 80 years the system has not served this country too badly. I have said at various times during the course of the Bill that if hospitals and transport performed half as well as the BBC, the Government would have no problems in defending public services or the public sector.
	So I am not persuaded. We must await the charter review. I am worried that even then we will get from the commercial sector a kind of "whine of the week" about the activities of a too-successful BBC. I am worried about placing limits on what the BBC should do. Imagine if this measure had been in place with the BBC and colour television or the BBC and digital. The BBC has been over the years an admirable innovator. As we heard earlier, it has an outstanding record in research, development and training.
	I want to see those assets well protected. I want to see a little track record from Ofcom before I even contemplate handing over to an untried regulator a public body that is working extremely efficiently and with considerable public approval. I also think—perhaps we saw it again yesterday in the little spat in the Foreign Affairs Select Committee in another place—that we must be careful to retain what has been one of the pieces of genius in the structure of the BBC: the buffer between the BBC as a public service broadcaster and the politicians of the day in power. We must defend that buffer carefully.
	With his usual skill, the noble Lord, Lord Lipsey, has enticed me a little along the way, because I want to see the BBC constrain itself in its commercial operations. There was a tendency for a while in the BBC to be beguiled by the idea of its entrepreneurial zeal and its commercial activities. It is better that it stands its credibility on its public service commitment.
	But as I said before, there is a catch-22 for the BBC. Let us not forget that the settlement negotiated with the Government asked the BBC to maximise its commercial operations. Therefore it is a little harsh, when the BBC does maximise its commercial operations, to say, "Oh well, now we're going to restrict you because you're doing that too well".
	We find the government amendments acceptable, but we have reservations about trying to jump the gun and make decisions too early on matters that are best left to charter review.

Lord Bragg: My Lords, I have a few brief observations. I think that finally, whether it is in three, five or six years, the BBC will be under Ofcom and the people who run Ofcom will be every bit as distinguished as those who run the BBC. I suspect that they will be the same sort of people, from the same sort of background and with the same sort of experience. The logic goes in that direction if Ofcom is to achieve what everyone in the House wants it to.
	But not yet, as was said on a more dramatic occasion. The time to do that is at the BBC Charter review, when a great deal of scrutiny should rightly be brought to bear on the BBC, and the idea of it being in Ofcom would be appropriately considered there—I agree with my noble friend Lord Lipsey. I also agree with the noble Lord, Lord McNally, that by that time we will be able to see the colour of Ofcom's coat and how it has matched up, because the BBC governors on the whole have done a very good job and everyone in the House who supports the BBC—as I do—wants to ensure that it is going into good hands.
	I agree with my noble friend Lord Lipsey on commercial interest. The noble Lord, Lord McNally, is absolutely right: the BBC was enjoined to carry on more commercial activities. It has done so very well—people think it has done so too well—but it is in areas that overlap with other areas of legitimate commercial activity. There are legitimate complaints of infringement and of the BBC being unduly favoured in market after market. We cannot walk away from that.
	Although I am friends with many of the people who run the BBC—Greg Dyke the director general is one of my best friends, I am pleased to say—they cannot walk away from the fact that it is hitting other organisations hard, from publishers to other broadcasters, some of which have just as much public service responsibility. I am sorry to keep hammering the point, but they have just as much public service responsibility and public service grit as the BBC does. Channel 4 and ITV often outmatch the BBC in their public service devotion. We agree that they took their lead from the BBC. But, although the BBC sets, and is, the standard, it is not the only one. The others have continued in many areas when the BBC has stepped out of its public responsibility for a while.
	Commercial overspill into other areas, which my noble friend Lord Lipsey discussed, should be examined and Ofcom is the place to do that. I fail to see how the governors can possibly be in a position to regulate it. They will follow what the Government have enjoined them to do—to commercialise their activities as much as possible—and they will let the hounds loose to do so. The BBC has developed some lean whippets over the past few years for that purpose. But they must be reined in differently. Things change, and the kaleidoscope comes up with colours that we do not always want. I agree with my noble friend Lord Lipsey on that point.
	The governors have done a very fine job. They are principled, intelligent and dedicated. Nevertheless, as my noble friend Lord Gordon of Strathblane said, it is extremely difficult to be responsible for the organisation as overseer and executive. Without casting any blame—it is a matter of human conduct and not blame—the governors get on very well with the executives and back them to the hilt time and again. How many times have the BBC governors backed the executive? Five thousand? How many times have they publicly said, "No, the executives were wrong. We object"? Two, three or four? That is how it is bound to be when people work together so closely. In the increasingly expansive, difficult, complicated and internationalising world of television and radio such togetherness—almost collusion—will no be more acceptable—

Lord Sheldon: My Lords, the noble Lord will be aware that there are many occasions where one does not publicise ones disagreement because it might cause more difficulty than if one did so behind the scenes.

Lord Bragg: My Lords, I am very aware of that. I am sure it has happened, but not that often. I am not here to blame the governors. For instance, it was the Governor-General of the BBC, Gavyn Davies, who suggested—perhaps in stronger terms—that the BBC return to arts programme. I am very glad that he did, and I am very glad that they are there. BBC governors can be very effective. But, in the new dispensation of television, I do not think that they will be able to play the role that noble Lords describe so finely and that traditionally governors have played. We are in a different universe.
	The great thing about the Communications Bill is that it is trying to chart the future sensibly. In many ways it is getting it right—cross fingers and touch wood. The idea of Ofcom looking across the board and being independent of all the existing transmission possibilities, which will increase, is very fine. Eventually, the BBC will subscribe to Ofcom willingly and make it far better than it would be without the BBC. In return, the BBC will be strengthened by the association.

Lord Alli: My Lords, I am afraid that I disagree with my noble friend Lord Gordon and commend the Government for their line on the issue—a novelty in this day and age. I do so precisely for the reason that the noble Lord mentioned. As an independent producer, I actually like the concept that if Ofcom does not like my programme editorially I can go somewhere else. It is fundamental to free speech and a good democratic society. No one person makes the final decision about what is published in the arena of television. It is a novel aspect of the debate, but it is one to which I wish to return when the debate opens again in a few years time or when there is charter renewal. We risk great error by allowing a single regulator to have single-voice control of our most powerful media. For that reason alone I do not want the BBC to come to Ofcom.

Lord Crickhowell: My Lords, I agree with the noble Lord, Lord McNally, on two points. First, I share his determination to do everything possible to protect public service broadcasting. That has been a consistent theme of everything that I have said in these debates. I, too, was tempted by the contribution of the noble Lord, Lord Lipsey, when he talked about some kind of regulation of these commercial activities. I suspect that my noble friend Lord Astor may tempt me in a similar way, but I failed to prevail on him to make his speech first. I admit to temptation, and perhaps I might be persuaded on that narrow field.
	More generally, there were two possible ways for the Government to have approached the issue. From the outset they could have said that they would include the BBC under Ofcom, and we could have approached this complicated Bill on that basis. The Government decided otherwise—to wait until charter renewal, and consider the matter then. Once that decision had been taken, we were, certainly on the Joint Committee, forced into the position that there was little point in our going into great detail about the future. When I look at the amendments this evening, I am reinforced in that view. Whatever the merits of the argument, to think that at the Report stage of this large and complicated Bill we can decide in a short debate what regulation of the BBC shall be included and what shall be left out is an impossible proposition.
	I indicated in Committee to the noble Lord, Lord Gordon of Strathblane, why I could not support his amendment. He has now put down exactly the same amendment, so I do not propose to repeat the points that I made then. The central point that I made on that occasion was that we need to future-proof the Bill, so that when charter renewal approaches, when we have the revised agreement, it is consistent with the Bill. That was the case that I put. I was grateful to the Minister who replied on that occasion. She said that the Government would consider the point carefully and that they might come forward with amendments that adopted the principle that was included in my amendment at the time. I now thank the Minister who is now in charge that he has fulfilled that obligation. He has come forward with amendments to make sure that there is future-proofing, that the charter and the agreement are covered in the way that I proposed. Having done that, it would be churlish of me to turn on the Minister to say that I support these amendments.
	Once the decision has been taken, as long as we can future-proof the Bill, this is a sensible way to proceed. However, my noble friend on the Front Bench might say that we must have an adequate opportunity, when the time comes to consider charter renewal and the agreement, for proper consideration and debate by Parliament—I would share that view. My noble friend Lord Astor pointed out in Committee that in the past we would often be landed with a done deal. The negotiations had all been put together in advance, we had a short debate and no proper opportunity for Parliament to comment. The Government should give firm commitments about their willingness to give Parliament a proper opportunity when the time comes for full consideration of these matters.
	Now that I have achieved from the Government that which I asked for in Committee, again it would be churlish if I did not at least answer a point made by the noble Lord, Lord Sheldon. Once again, the Government, in introducing the clauses that he criticised, were responding to the Joint Committee, of which I was a member.
	The Joint Committee received a great deal of evidence on the question of fines. Arguments were put on both sides, including the kind of arguments that noble Lords have advanced this evening. Incidentally, as we pointed out, the ITC, BSC and the Radio Authority all considered that financial sanctions ought to apply to the BBC, not least in fairness to other broadcasters. We recommended that the Government should act as they have. Paragraph 375 of our report stated:
	"Extensive and repeated payment of fines by the BBC would be a waste of licence payers' money, for which the BBC and its Governors would be held publicly accountable. This seems to us a reason for the BBC to so arrange its activities as to ensure that it does not incur such penalties, and not an argument for immunity from such penalties. We recommend that the proposed Agreement empower OFCOM to fine the BBC in respect of breaches of tier one and tier two obligations (other than those relating to impartiality) in the same way and to the same extent as other broadcasters".
	Having made that recommendation, I am bound to support the Government if they seek to keep in the Bill the clauses as they stand, despite the amendments that have been moved.
	I am grateful to the Government for having accepted the suggestions that we made on that occasion about future-proofing. As they have done that, I for one am content to wait until the licence renewal debate to continue the argument, subject to some kind of undertaking—a pretty firm undertaking—that they really will allow Parliament when the time comes adequate opportunities to review the terms and conditions that are proposed.

Lord Dubs: My Lords, while I am persuaded by the arguments of my noble friend Lord Gordon, I hope that he deploys them with equal effectiveness when we come to charter renewal. The noble Lord, Lord Crickhowell, is absolutely right. The issue of bringing the BBC under Ofcom and the consequent changes that will be required in the role of the governors and other aspects of the BBC make this matter too big to deal with as one amendment on this occasion. I am persuaded but, as my noble friend Lord Lipsey said, charter renewal is the appropriate time at which to engage in the whole range of issues relating to the BBC—for which all of us have the most enormous respect and affection, without saying that nothing should ever change.
	The only regulator that has any say over the BBC at the moment is the Broadcasting Standards Commission, of which I am the chair, and of which the noble Baroness, Lady Howe, was an illustrious predecessor in the chair some years ago. Certainly there has been no difficulty in our day-to-day work in dealing with the BBC, as with all the other bodies. It works perfectly well, and I see no problems. We have no sanctions such as fining the BBC; our only sanctions are to uphold complaints and to publish when we uphold complaints, when they apply to the BBC or any other broadcaster. On certain occasions, in relation to fairness and privacy, we have the power to have on-air or newspaper publication of complaints.
	In my experience, the BBC and the other broadcasters are very unwilling to have complaints held against them, and that serves as an adequate sanction. Therefore, although I see that the prospect of fining the BBC is in the Bill, I hope that the sanction will never be used. I am confident that it is unlikely to be used.
	My noble friend Lord Sheldon, in defending the BBC, made a point on which I must take issue, in so far as I understood it. He said that when the governors as regulators of the BBC have an issue, it is sometimes inappropriate that the issue should come out in the open, as it is better dealt with within the walls of the BBC. I hope that I have got him right; that is my wording but, I believe, his sentiments.

Lord Sheldon: My Lords, my noble friend is fairly close, but not exactly right. The point I sought to make is that that is how it has happened; how it should happen is closer to what my noble friend suggests.

Lord Dubs: My Lords, I am grateful for the correction because I think that where the Governors of the BBC fall down is that there is not the transparency which I would want to see associated with a regulator when it is acting on behalf of the public vis-a-vis the management of the BBC, in so far as the governors can put themselves in that position. I understand that that is one of their functions and that they have to represent the public as regulators.
	I believe that any regulator should be open and transparent. Everyone should be able to see what are the issues on which the regulator has had to take action, whether that regulator be the existing ITC, the BSC or the Radio Authority at the moment, or Ofcom in the future. I should like the BBC to demonstrate an equivalent transparency when the governors are acting in a regulatory capacity. That has to be the bottom line in parliamentary regulation.
	I am very much in favour of the amendment tabled by my noble friend Lord Lipsey. The arguments put forward about the BBC not becoming involved in some of these issues do not apply to new ventures in the commercial sector, where they go head to head with the commercial broadcasters. There I think it appropriate that Ofcom should be able to exercise the power.
	Finally, when we consider charter renewal, which is some way ahead, I certainly am concerned to keep the BBC out of politics; that is to say, the fewer arguments the BBC has with any Secretary of State, the better for its independence. I shall look at the way in which the BBC should relate to Ofcom influenced by my wish to avoid the BBC becoming too entangled with any Secretary of State of the day.

Viscount Astor: My Lords, since my noble friend Lord Crickhowell was kind enough to refer to what I said in Committee, I rise to echo and agree with much of what he has said. One day the BBC will come under Ofcom. We have yet to persuade the BBC that it would be beneficial for it so to do.
	I think that it would be extremely beneficial because I agree with what has just been said by the noble Lord, Lord Dubs. We do not want too much interference from a Secretary of State. I hope that, when we come to charter renewal, the BBC can be persuaded that it will be strengthened and that it will be given more power, as it were, to resist interference from politicians of any colour.
	I recognise that the Government have moved on this in producing their amendments, which go a long way to satisfy the concerns that were expressed in Committee.

Baroness Howe of Idlicote: My Lords, I wish to intervene only briefly in the debate. Almost exactly the same arguments in support of one side or the other were advanced when we considered this matter in Committee. All those arguments were important and were put with the aim of achieving the best possible outcome both for our nation and, indeed, for the BBC. I belong to the group which says, "Not yet, and perhaps never". However, in my view, now is the time to wait until the charter review and until Ofcom is up and running and able to appreciate just how huge its task is.
	The BBC is a huge asset: "A piece of genius", was how the noble Lord, Lord McNally, put it. It has set standards not only in this country, but throughout the world.
	I shall not take up much of the time of noble Lords, but I want to say not only, "Not yet" or "When the time is right", but also, "Let us reach the right decision when we come to consider the whole issue again". As the noble Lord, Lord Crickhowell, pointed out, now that we have in place the requirements for future-proofing that he sought, once those have settled in, let us see whether the arguments are as convincing then as some would think.

Baroness O'Neill of Bengarve: My Lords, although the amendment before us may have much to commend it at the stage of charter renewal, there is one element in it which I hope that no friend of the BBC or public service broadcasting, or even of freedom of speech, would wish to see continued; that is, giving a regulator the power to approve or amend all BBC statements of programme policy. Noble Lords have hardly referred to this aspect, but I think that it is, as it were, an intrusion too far. For that reason alone we should probably not support this amendment.

Baroness Buscombe: My Lords, perhaps noble Lords will allow me now to speak to my amendments in this grouping.
	I begin by saying to my noble friend Lord Crickhowell that certainly for my part, once the Bill has been fully scrutinised, I shall certainly harry both the Government and the BBC to ensure that we in Parliament have full opportunity to debate and discuss charter renewal. The noble Lord, Lord Dubs, said that that was some way away yet but we are half-way through 2003 and charter renewal will take place in 2006. As we know, these Sessions go by so quickly. We must get on to that debate early in the next Session. The more that we can build relationships with the BBC on that issue, the better. I certainly intend, as Shadow Minister, to do that.
	In speaking to Amendment No. 188, I also wish to speak in support of Amendment No. 112, tabled in the name of the noble Lord, Lord Lipsey. I would also like to reiterate the wholehearted support that I gave to the noble Lord, Lord Gordon of Strathblane, in Committee on Amendment No. 100. In addition, I commend the Government for responding to my amendment—I stress that it was my amendment—to future proof the Bill by facilitating the future incorporation of Ofcom's functions into the Royal Charter. With the imminent onset of the BBC Charter renewal process, it is imperative that the dominant broadcaster is not partially exempted from external regulation before the issue has been extensively debated by Parliament. We therefore welcome the Government's reference to the BBC Charter rather than the agreement alone in the relevant provisions of the Bill.
	Amendment No. 188 seeks to ensure parity between the BBC and commercial operators in the matter of cross-promotion. It seeks to confer a duty on the BBC to make arrangements to secure that any rules made by Ofcom regarding the regulation of promotion of programmes, channels and related services are observed. This would ensure that any rules set by Ofcom which apply to commercial broadcasters apply equally to the BBC. Let me be absolutely clear that the intention of the amendment is not to attack the BBC or to prevent legitimate promotional activity, but simply to bring the BBC into line with the accepted standards to which all other broadcasters are required to adhere.
	Having carefully considered the comments made by the former Minister, the noble Baroness, Lady Blackstone, on this issue during Committee, I remain of the view that this is an important issue where existing rules and regulations covering the BBC do not give sufficient comfort and the Government's response was therefore inadequate.
	First, the Minister said that Ofcom will have concurrent powers under the Competition Act which will apply to the BBC as they do to other organisations. It strikes me as highly damaging to the Government's own stated aims and objectives, at a time when we are trying to get the industry to work together to promote the benefits of digital TV, to suggest that the only recourse available for those who object to unfair cross-promotions is to pursue the matter through the courts under the Competition Act. This is hardly likely to engender a spirit of co-operation.
	In any case, the issue of cross-promotion involves wider public policy objectives than simply ensuring fair competition. The ITC's code is underpinned both by its competition and content functions, and the code is intended not just to prevent unfair competition but also to engender clear and accurate consumer information. There is surely an even stronger case for the BBC's cross-promotional activities to be assessed against such a consumer information test, given that it is public money which is being used to fund these promotions.
	Secondly, the Minister highlighted that the BBC fair trading commitment goes beyond competition law, and is subject to annual audit. But the fair trading commitment is virtually silent on the issue of cross-promotion and contains nothing like the detailed requirements imposed on the private sector through the ITC code, which I set out in some detail at the Committee stage.
	Thirdly, the Minister referred to the BBC published commercial policy guidelines. Again, we can see nothing in those guidelines which provides anything like the detailed commitments contained in the ITC code. Indeed, the proof that no such internal constraints currently exist can be found in the heavy promotional activity that the BBC is currently conducting. I referred during Committee to the ITC rules including prohibitions on excessive promotion of a particular channel, service or suite of channels or services; and restrictions on the promotion of a specific digital platform. It is self-evident to anyone who has seen the BBC's promotions for Freeview and its own digital channels that these promotions would breach the ITC guidelines or any equivalent guidelines in place within the BBC if they existed.
	The Minister said that my amendment would place the BBC under the scrutiny of Ofcom, contrary to agreed policy. Even if I accepted that policy outcome, two important points need to be made. First, as I have already noted, the ITC's code is underpinned by both the ITC's competition functions and its functions in relation to content. As far as the latter is concerned, it is agreed that the BBC will fall within Ofcom's remit, so to that extent compliance with the cross-promotional code is already agreed government policy. Secondly, many in the industry might accept the BBC's remaining outside Ofcom's remit in the area if there was any sign of the BBC taking the issue seriously and moving to provide detailed internal rules on cross-promotion. But, as we have seen, existing rules are silent on the issue and the BBC's promotions would clearly breach the ITC code.
	We accept that the BBC has a major role to play in promoting the benefits of digital television and dispelling customer confusion about the new technology. That its existing approach is manifestly not working was highlighted by a recent press article. Media Week reported the finding of a poll in which 60 per cent said that Freeview was the name for new BBC channels and services rather than a new free-to-air broadcast platform. Half thought Freeview was available via a BBC set-top box. I strongly believe that, to allay such confusion, the BBC should be required to adhere to accepted standards for cross-promotions.
	I briefly wish to speak in support of Amendment No. 112, tabled by the noble Lord, Lord Lipsey, to which my name was added. It ensures that Ofcom could monitor compliance by BBC companies with any guidelines published by the BBC to which subsidiaries were required to adhere when performing commercial activities. I do not wish to repeat what was said in Committee. However, I believe that it is imperative that all commercial broadcasters, including the commercial arm of the BBC, compete on a level playing field.
	I have one final point. In Committee, I addressed a question to the noble Baroness, Lady Blackstone, concerning the draft amendments to the BBC agreement. I do not recall receiving a reply. Simply put, will Parliament have the opportunity to debate those draft amendments to the BBC agreement and, if so, when?

Lord Thomson of Monifieth: My Lords, so far as the broadcasting aspects of the Bill are concerned, we have to make a judgment about how best to preserve the essential character and quality of public service broadcasting in this country. I am bound to say that I continue with the belief that it is a safeguard of that unique feature of British achievement that one should have two regulatory centres. There is something to be said for having Ofcom regulating more directly the commercially funded sector, while continuing regulatory arrangements with the BBC.
	I disagree with the noble Lord, Lord Gordon of Strathblane, in believing that there is such a great difference between the two methods of regulating the quality and character of public service broadcasting. It is true that the BBC has a problem with its board of governors being close and proud about their programme-makers. Therefore, there is a closeness between governors and management. I am glad to see that the BBC is taking steps to produce more of an arm's-length relationship there, which is important.
	I am bound to say that equally, in the days when I was chairman of the Independent Broadcasting Authority, I was sometimes accused of being rather proud of the unique British achievements—as unique as the BBC—of having a commercially funded public service broadcasting system. I was sometimes accused of what I think was called, in the jargon, regulatory capture. There are problems for regulators in such situations, and the distinction between the BBC regulatory arrangements and those of Ofcom is not so vast. There is public advantage in having, in a sense, a bit of constructive tension between them.
	From a purely pragmatic point of view, I shall repeat what I said in Committee and what others have said today: there is much to be said for letting Ofcom settle in, and for us to look at the future of the BBC when the charter comes up for renewal. I think that it was Mark Twain who once mentioned that the most difficult thing about prophecy was to prophesy the future. I do not feel so sure that, when that happens, we shall all end up with a great single regulator of all such matters in this country. I rather suspect that, in one way or another, the duality of broadcasting regulation trying to preserve quality and character in public service broadcasting will be maintained at that stage.

Lord McIntosh of Haringey: My Lords, this debate, which began with a clash between my noble friends Lord Gordon and Lord Sheldon, seems to have settled into a degree of consensus. I find that rather encouraging.
	First, perhaps I may introduce—I nearly said "very briefly" again; when I hear those words I reach for my stop-watch. That is a warning to anyone who wants to use the phrase in future.
	Amendment No. 101, coupled with a new definition of the BBC Charter and agreement in Amendment No. 219, enables the BBC charter to be capable of conferring functions on Ofcom to the same extent as the BBC agreement. The remaining amendments are consequential and ensure that the policy is applied consistently throughout the Bill. These amendments respond to an Opposition amendment moved in Committee by the noble Baronesses, Lady Buscombe and Lady Wilcox, which was accepted in principle by my noble friend Lady Blackstone.
	I have listened carefully to the arguments put forward by the Opposition on this issue, and we felt able to accept the principle that it would be right to keep open the possibility of Ofcom's regulatory functions in respect of the BBC, other than those contained in the Bill, being placed in the BBC Charter and not solely in the BBC agreement as the Bill currently provides.
	Before leaving this point, let me reassure the noble Lord, Lord Crickhowell, and the noble Baroness, Lady Buscombe, that, as we come up to consideration of the BBC charter, there will be full consultation and a full opportunity for parliamentary debate. I cannot be so encouraging about the BBC agreement. For some reason that I have never understood but which goes back a very long way, approval of the BBC agreement is after debate in the House of Commons and not in this House. Anyone who wants to explore that is welcome to do so.

Viscount Astor: My Lords, I may be able to help the Minister. It is because there is an element in the agreement relating to wireless which necessarily requires a Motion to be passed in another place.

Lord McIntosh of Haringey: My Lords, it sounds like a Ways and Means Motion or something of that kind. I am glad to have that explanation.
	I turn now to the other amendments in the group. Amendment No. 100 in the name of my noble friend Lord Gordon replaces the general facilitative function for Ofcom to be given functions by the BBC agreement with a list of specific powers relating to statements of programme policy and others. I seem to have a page missing from my briefing; I may have to return to Amendment No. 100 when I have a fuller speaking note—no, I am being handed the notes; now I have three of them. This is overkill.
	Trying to set out Ofcom's relationship with the BBC in the Bill rather than in the agreement conflicts with our basic approach to the BBC. I think that our basic approach has received a good deal of assent during the course of this debate. The Government's aim is for the BBC to be regulated by Ofcom on a basis that takes account of the corporation's distinctive role and constitution, particularly its special relationship with Parliament. The BBC's obligations are to be set out primarily in its agreement with the Secretary of State rather than in the Bill in order to maintain the BBC's accountability to Parliament. Here, it is clear that I part company from my noble friend Lord Gordon, who seems to think that the opposite is the case.
	Amendment No. 112 would give Ofcom responsibility for monitoring compliance with any guidelines published by the BBC for BBC companies undertaking any commercial activities in the United Kingdom. This would only be in relation to the making, acquisition or selling of programmes. This would effectively give Ofcom the function of enforcing aspects of the BBC's fair trading commitment. UK and European competition law applies to the BBC as it does to any other broadcasting organisation. Ofcom will have powers to apply UK competition law to broadcasting and related activities if the BBC acts anti-competitively.
	I turn now to the amendment of the noble Lord, Lord Sheldon. I will start with Amendment No. 104A, which removes the express power for the BBC agreement to provide for penalties to be imposed on the BBC for breaches of the agreement or the Bill. It was the Joint Scrutiny Committee, as we have been reminded, which came down in favour of giving Ofcom the power to fine the BBC, and the Government accepted the committee's view.
	It is true that a fine can reduce funding for programmes and penalise the licence fee payer. Equally, it can be argued, as the Joint Scrutiny Committee did, that a fine imposed on a commercial broadcaster will ultimately work to the disadvantage of viewers or listeners. The important part is for the BBC to ensure that it does not incur fines. There is no reason to exclude the BBC from the fining procedure.
	The ability to fine the BBC ensures that it is treated in the same way as other broadcasters, and this completes the level playing field between the BBC and other public service broadcasters. Ofcom must be able to impose sanctions as the ultimate deterrent to the BBC's breaching its obligations. The Government recognised that the issue of fines was not straightforward, and they specifically invited comments on this issue during the draft Bill consultation. On balance, given the principle of parity of treatment between the BBC and other broadcasters, whenever appropriate we think that it is right that Ofcom should be able to fine the BBC.
	Amendment No. 112 would give Ofcom responsibility for monitoring compliance with any guidelines published by the BBC for BBC companies undertaking any commercial activities in the UK. This would only be in relation to the making, acquisition or selling of programmes. This would effectively give Ofcom the function of enforcing the BBC's fair trading commitment. UK and EU competition law applies to the BBC as it does to other broadcasting organisations. As I said, Ofcom will have powers to apply UK competition law to broadcasting and related activities if the BBC acts anti-competitively.
	I was asked about Ofcom's competition powers; they are strong competition powers. The powers of investigation in terms of their concurrent powers are the same for the BBC as they are for other broadcasters. The BBC Fair Trading Commitment and Commercial Policy Guidelines are published internal documents—such as those used by many large companies—which go over and above the requirements of competition law. They have been drawn up by the BBC governors and are enforced by them.
	The guidelines are designed to ensure that the BBC complies with competition law in carrying out its activities, and that all those activities are consistent with, and supportive of, the BBC's core purpose as a public service broadcaster. The guidelines underpin compliance with the law, but are not a substitute for it. The BBC's fair trading framework is also subject to annual audit by independent auditors, and their opinion is published in the BBC's annual report and accounts. It seems right and proper that the enforcement of these guidelines should continue to be a matter primarily for the BBC's board of governors rather than for an external regulator.

Lord Lipsey: My Lords, I am grateful for what the Minister said and has confirmed about Ofcom's powers. In view of the great concern out there in the real world about whether the BBC is following its internal guidelines and in view of the fact that the Whish Report looked at the actual rules and said that they were right, would the Minister consider asking Professor Whish to follow up his report by looking at how the guidelines are applied in practice, or some other method of achieving the same objective? That might help to get us out of the difficulty in which we find ourselves.

Lord McIntosh of Haringey: My Lords, I am not convinced that there is a difficulty but I am always receptive to suggestions to look for up-to-date evidence. I shall take that suggestion away, think about it and respond to the noble Lord, Lord Lipsey, accordingly.
	Amendment No. 188 would make the BBC subject—in the fullest and most analogous way practicable—to any rules drawn up by Ofcom to regulate the promotion of programmes, channels and related services that are provided by licensed television service broadcasters. The amendment is probably designed to address the fact that, since Ofcom will not licence the BBC's public service channels, those channels will not be subject to Ofcom's cross-promotion rules. The BBC's promotional activities are covered by competition law, which will be enforced concurrently by Ofcom and the OFT.
	The BBC's own commercial policy guidelines contain commitments that the BBC's core public services will not be used unfairly to promote BBC commercial activities and that there will be no promotion of BBC commercial products and services within BBC programmes on the public services. If there are any suggestions that that is not being adhered to, the matter should be addressed to the BBC.
	The promotion of licence fee funded services is in the interest of licence payers, because it informs them about the range of services for which they are paying. For example, licence fee payers have been informed about Freeview, the new digital terrestrial channel—I appreciate the lack of understanding on the part of many people about what it actually contains and where it comes from—along with the cable and satellite platforms, as a means of viewing the new BBC digital channels.
	On balance, we believe that the current approach is the right one; that is, that the BBC's position is best handled on the basis of clear commitments by the BBC itself, set firmly within the overall framework of UK and EU competition law, and enforced by the governors.

Lord Gordon of Strathblane: My Lords, this has been a very diverse debate, which is not surprising because noble Lords have spoken to very diverse amendments. On my amendment, which is all that I can really speak to, I am conscious that I will never convince some noble Lords. That distresses me because I should like them to be assured that I fully share their respect and admiration for the BBC. However, we at least begin from the same point.
	The noble Lord, Lord Alli, advanced a rather individual argument, and I was surprised that it was backed up by the noble Lord, Lord Thomson. The noble Lord, Lord Alli, said that the more regulators that there were, the better, so that independent producers like himself can play one against the other. That is a perfectly legitimate argument but, frankly, it is a good argument against Ofcom altogether. We should be much better off with Channel 4 and Channel 5 and, if one was beaten by three of them, one could go to the fourth. The overwhelming undertone that I take from the debate is that this is not felt to be the right time for such an approach. To that extent, I shall withdraw the amendment and I shall not return to it at Third Reading.
	Some people feel that charter renewal is the relevant time. I point out that we will probably debate charter renewal at some time in the next Session; that debate is not that long away. Moreover, the BBC is such an important organisation that it could well affect the very structure, let alone the staffing, of Ofcom and it would be much better to do that up front. I have not been able to convince the House of that and, to that extent, I thank the Minister for his reply and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey: moved Amendments Nos. 101 to 104:
	Page 175, line 13, leave out paragraph (a) and insert—
	"(a) the BBC Charter and Agreement, and" Page 175, line 19, leave out "an agreement falling within subsection (1)(a)" and insert "or under the BBC Charter and Agreement"
	Page 175, line 22, leave out "the agreement" and insert "that Charter and Agreement"
	Page 175, line 23, leave out "such an agreement" and insert "that Charter and Agreement"
	On Question, amendments agreed to.
	[Amendment No. 104A not moved.]

Lord McIntosh of Haringey: moved Amendment No. 105:
	Page 175, line 24, leave out subsection (3) and insert—
	"(3) The BBC must pay OFCOM such penalties in respect of contraventions by the BBC of provision made by or under—
	(a) this Part, or
	(b) the BBC Charter and Agreement,
	as are imposed by OFCOM in exercise of powers conferred on them by that Charter and Agreement."
	On Question, amendment agreed to.
	[Amendments Nos. 105A and 105B not moved.]

Lord McIntosh of Haringey: moved Amendment No. 106:
	Page 175, line 32, leave out "by virtue of subsection (3)" and insert "by OFCOM in exercise of a power conferred by virtue of the BBC Charter and Agreement"
	On Question, amendment agreed to.

Viscount Astor: moved Amendment No. 107:
	Page 176, line 4, at end insert—
	"(10) It shall be the function of OFCOM to oversee the terms of trade between the producers of independent radio and the BBC.
	(11) In subsection (10), a reference to the producers of independent radio is a reference to such producers as the Secretary of State may by order specify."

Viscount Astor: My Lords, the BBC is required to commission at least 25 per cent of its television programming from the independent sector, yet there is no quota for radio. In Committee, I argued that quotas should be extended to BBC radio because the licence fee is, in part, designed to nurture Britain's creative base, and that includes radio as well as television. The Government opposed such a move, and I accept much of the argument that the Minister put forward in Committee about quotas. Therefore, I have returned on Report with this amendment, which I believe is a compromise and which I very much hope the Government will be able to accept.
	My amendment would not only help the independent radio production sector grow without the imposition of a statutory quota; it would also clear up an anomaly in the Bill. As currently drafted, the Bill gives Ofcom the power to oversee the terms of trade between the BBC and independent television producers but not between the BBC and independent radio producers. That is particularly odd as the BBC is far more powerful in radio, where it controls more than 50 per cent of the market.
	Effectively, independent radio producers are faced with a single buyer of their services—the BBC. What is more, the buyer—the BBC—is able to source product internally. That gives the BBC an enormous power, which means that effectively it can determine the terms on which it trades. Independent scrutiny by Ofcom would ensure that the BBC did not abuse its dominant position.
	It has been said that the live nature of most radio programming means that the independent radio production sector can never grow in the same way as its television counterpart has done. However, independent radio producers dispute that, pointing to the huge amount of live programming that they already do. Greater transparency over the way that the BBC deals with independent radio producers would be of real benefit to the industry, enabling it to grow and prosper. I hope that this compromise amendment will find favour with the Government. I beg to move.

Lord Alli: My Lords, I support the amendment moved by the noble Viscount, Lord Astor. In Committee, I myself moved an amendment which dealt with the quota system for BBC radio. I decided not to move it on Report as I had a conversation with the head of BBC radio during which she assured me that the BBC operated a 10 per cent voluntary quota and was very keen to see that quota being built on. She also reassured me on the terms of trade issue between independent producers and the BBC.
	Therefore, if the amendment were accepted by the Government, that would be a further reassurance. But if my noble friend on the Front Bench is inclined not to accept it, I wonder whether he might follow up the offer of the head of BBC radio to write to my right honourable friend the Secretary of State giving her commitment and assurance that the informal quota will continue to be adhered to and, indeed, that she will safeguard the terms and conditions of independent radio producers. If he is willing to do that, I suspect that we may achieve the same result but via a different means.

Baroness Buscombe: My Lords, I support the amendment tabled by my noble friend Lord Astor. As noble Lords have already said, the amendment would allow Ofcom to oversee the terms of trade between the BBC and independent radio producers. I spoke on this matter at some length in Committee and I do not propose to repeat what was said. However, I should like to reiterate my support for the independent radio sector. That said, I am more comfortable with this amendment than the one proposed by my noble friend in Committee because it is less prescriptive and it does not allow for a statutory quota. I believe it is important that the dominant broadcaster does not benefit unjustly from its position and that the terms of trade under which the parties operate are subject to a level of external scrutiny.

Lord McIntosh of Haringey: My Lords, I certainly agree that this amendment amends very reasonably the one moved in Committee and that it avoids some of the difficulties which arose from that amendment. The paradox is that this is about the commissioning of independent radio productions, and despite the fears of noble Lords, which lead them to wish to impose terms of trade or for Ofcom to oversee terms of trade between independent radio producers and the BBC, the BBC is virtually the only commissioner of independent radio productions. That does not mean that it is a monopsonist; rather it is an oligopsonist in the sense that there are many bodies within the BBC that commission radio productions.
	However, they are bound together by a commissioning code of practice for independent producers which is produced by BBC network radio, and of which I have a copy. I would like to send a copy of this very extensive code to the noble Baroness. It goes far beyond the issue of quotas and into the detail of the commercial relationship between independent radio producers and the BBC. I have scanned it rapidly, and it seems a very fair portrayal of a good commercial, intellectual and creative relationship between the BBC and its suppliers.
	I do not know whether I can persuade BBC network radio to guarantee that this will continue, as the noble Lord, Lord Alli, suggested. However, the code has been agreed with the Office of Fair Trading; it has been in operation for the past six years; it has recently been updated to extend to all BBC radio services; and I have no reason to believe that the BBC intends to depart from it. With the combination of the BBC's code of conduct and the arguments that UK and EU competition law apply to the BBC as to other broadcasting organisations, and that Ofcom will have the power to apply UK competition law to broadcasting and related activities if the BBC acts anti-competitively, I hope that the amendment will not be pressed.

Viscount Astor: My Lords, I am grateful for the Minister's response and for the support of the noble Lord, Lord Alli.
	The Minister has gone some way to satisfy my concern. There is a code which governs the terms of trade between independent television producers, and its advantage is that if an independent television producer feels for some reason that they have been done down or have not had an opportunity to do what they like, they can read the code and appeal through it. The BBC has kept that, and it works well.
	In Committee, the noble Baroness, Lady Blackstone, said as a response to the code governing the terms of trade with independent television producers:
	"The code was developed in response to concerns raised by the Joint Scrutiny Committee and the ITC in its programme supply review report. We are not persuaded that there is a case for applying a similar requirement, and one which applies only to the BBC in the radio context".—[Official Report, 22/5/03; col.957.]
	It would be helpful if the Minister could explain the difference. Is he saying that there is a code? Previously, he said that the code did not apply.
	I hope the Minister will consider this issue. If he cannot answer me now about the difference between the two replies, I would be happy to discuss this between now and Third Reading to come to a satisfactory conclusion.

Lord McIntosh of Haringey: My Lords, my door is always open.

Viscount Astor: My Lords, I am grateful to the Minister, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Buscombe: moved Amendment No. 108:
	After Clause 195, insert the following new clause—
	"INVESTIGATION OF THE BBC BY THE NATIONAL AUDIT OFFICE
	In Part 2 of Schedule 4 to the National Audit Act 1983 (c. 44) (nationalised industries and other public authorities) "the British Broadcasting Corporation" is omitted."

Baroness Buscombe: My Lords, with this I shall speak to Amendment No. 111. We reach now the important issue of the National Audit Office.
	I believe that we have come a long way since Second Reading when I set out a case, supported by other noble Lords, for the need to enable the Comptroller and Auditor-General to have full value-for-money access rights to the BBC, thus opening it up to the same scrutiny on Parliament's behalf as all other bodies that are funded by tax. On Second Reading and in Committee I made the point that there is total consensus on the issue among members of the Commons Public Accounts Committee. In our view, this scrutiny would not impinge in any way on the editorial independence of the BBC but would give some measure of accountability and transparency. We believe that what we seek is in the best interests of the BBC.
	I am pleased to report that I believe that we have now reached a happy agreement. We have moved on from the debate in Committee which addressed what we referred to as the Sharman compromise. Sadly, the noble Lord, Lord Sharman, has had to leave. I had wished to pay tribute to the noble Lord for his assistance in bringing together the Government, the BBC and the National Audit Office through his suggested arrangement. In Committee I stated that I was uncomfortable with some aspects of the noble Lord's proposal. It did not go quite far enough and lacked some clarity and certainty, in particular with regard to the important imperative if agreement were to be reached that any review carried out by the National Audit Office should be laid before Parliament and then reviewed by the Public Accounts Committee.
	Since that debate, I have been in discussion with the Comptroller and Auditor-General and the Minister. I am grateful to the Minister for those discussions. I have also been in discussion with my honourable friend in another place, Mr Edward Leigh, chairman of the Public Accounts Committee, and the BBC through my noble friend Lady Hogg, who is a very able governor of the BBC. I am extremely pleased to be able to say that I believe that an agreement has been reached. The Minister wrote a letter to me on 19th June—it was placed in the Library—entitled, Ensuring the efficiency, effectiveness and economy of the BBC's operations. I do not intend to repeat it verbatim. However, one or two aspects worried me and the Shadow Secretary of State, my honourable friend in another place, John Whittingdale, MP. We have talked to the Comptroller and Auditor-General and others involved in the agreement and we are now comfortable with withdrawing the amendment tabled. We would have liked the Government to have accepted the amendments. However, we appreciate that we have come a long way and that the BBC has been extremely helpful, as has the Comptroller and Auditor-General, in reaching this consensus.
	I have given prior notice to the Minister that I wish to seek his assurance on a matter. I know that it is difficult because the Minister is not the governors of the BBC so, in a sense, I am making these points for the benefit of Hansard and for the benefit of all beyond your Lordships' House so that they can understand where we are. I wish to seek his assurance that the governors of the BBC understand the unspoken framework within which the agreement is intended to work. We seek to achieve greater accountability and greater transparency. The expectation of your Lordships' House is, we believe, set upon the agreement facilitating a number of reviews and the National Audit Office would be conducting some of those.
	We want assurance, which I believe is reasonable, that the audit committee of the BBC is committed to holding dialogue with the Comptroller and Auditor General. We also want to ensure that the audit committee will be both committed and supportive of providing the Comptroller and Auditor General with sufficient access to the BBC to enable the Comptroller and Auditor General to do a good job and to have the requisite understanding of the BBC's business. That is extremely important. The audit committee of the BBC will decide which programme of review it wishes to undertake, in consultation with the Comptroller and Auditor General, but that would be in the expectation that some of those reviews would be carried out by the Comptroller and Auditor General. So I am saying that the audit committee will decide which reviews it undertakes, but it is expected that some of those reviews will be carried out by the Comptroller and Auditor General.
	Once reports are produced by the Comptroller and Auditor General, they will be laid, in their entirety, in a timely manner, before Parliament. The publication of the BBC's annual report will act as a backstop date, we suggest, when the Comptroller and Auditor General will lay the reports before Parliament, before the House of Commons. Then it will be open to Parliament to decide how to review those reports and how they will be taken, discussed and considered within the House of Commons.
	It is reasonable to suggest and to encourage the Comptroller and Auditor General to report on behalf of the National Audit Office within, I suggest, a period of two years from now, to Parliament to inform Parliament as to how the arrangement is proceeding. I believe that it is accepted by all those party to this three-way agreement between the BBC, the National Audit Office and the Government, that this will be a trial process. It is important that we accept that the parties, in particular the National Audit Office and the Comptroller and Auditor General, should be left to pursue that arrangement. Of course, on Her Majesty's Opposition Benches we see it as a process that will continue pending charter renewal. We are extremely grateful to all the parties concerned.

Lord Crickhowell: My Lords, I am grateful to my noble friend for giving way. I have been listening with great interest and I congratulate my noble friend. Perhaps she can enlighten me on one point because she knows about the agreement and I do not. Am I right—I hope that I am—in assuming that the Comptroller and Auditor General will deal directly only with the BBC and that there will be no involvement of the finance officer of the department because that, to me, is absolutely fundamental. If this is an arrangement in which the National Audit Office deals with the BBC, that is fine, but I was concerned that we would have the kind of arrangement that normally happens with public bodies where the poor old public body is left stranded and the principal finance officer or the permanent secretary becomes involved in the exchanges with the National Audit Office.

Baroness Buscombe: My Lords, I am extremely grateful to my noble friend for that intervention. I am pleased to confirm that what he asks is the case: this is an arrangement. Notwithstanding that we have obviously looked to the Government for their support for the agreement, it is our understanding—which I believe is contained precisely and accurately in the letter addressed to myself from the Minister—that this is an arrangement between the NAO and the BBC governors, in terms of carrying it out.
	My noble friend is right to raise the issue because it was proving a sticking point on the part of the BBC and rightly so. One of the points I made on Second Reading and again in Committee is that it is terribly important that the BBC governors and the NAO can act independently of government. I urge noble Lords to read this letter of 19th June to reassure themselves that that is the case. Indeed it states that the Government do not envisage a role for the Department for Culture, Media and Sport or its accounting officers in the process and that such a role would infringe the independence of the BBC in its day-to-day operations. I hope that that reassures my noble friend. I beg to move.

Lord Sheldon: My Lords, the noble Baroness urges noble Lords to read the letter. I went to the Library today and they could not find the letter. It is a great pity that we are discussing a letter that is supposed to be in the Library but which was not there—they could not find it anyhow. The noble Lord, Lord Crickhowell, made the useful, but rather limited, point that the finance officers should not be involved.
	As well as my long period of service as chairman of the Public Accounts Committee I spent eight to 10 years as a member of the Public Accounts Committee. Over that period I looked at the BBC. In my later years as chairman we considered whether the BBC's role should be investigated by the Public Accounts Committee. When I look at the new clause in Amendment No. 111, I see that subsection (3)(a) makes it,
	"an obligation to carry out an examination into efficiency, economy and effectiveness of the BBC's services".
	That is value for money.
	Economy is not difficult to understand: one obtains at the cheapest price available.

Baroness Buscombe: My Lords, will the noble Lord accept that I said at some length that I do not propose to pursue these amendments because I believe we have reached a good and helpful consensus?

Lord Sheldon: My Lords, I understand that, but I have not seen anything of it. Surely the noble Baroness cannot just say that she has come to an agreement and an understanding when most of us have not seen the letter. I went deliberately to the Library and asked to see it. I might have agreed with what it said, but I have not seen it. If it is not here, I must speak to what is here, which is the matter before us in the amendment.
	When we look at economy, we can see that that is easy to handle. When we look at efficiency it is not too difficult to understand that we try to obtain the best possible deal for the lowest possible price. When we look at effectiveness, on the other hand, it becomes much more difficult. How do we deal with effectiveness in the televisual medium? What is effectiveness? Is it a popular programme; one that instructs people; or one that receives a great deal of admiration from the literary people concerned, or from whatever bodies might be involved?
	I am very uneasy about the matter. I was incremental in securing John Bourn as the Comptroller and Auditor-General. He is an admirable man, and I have no doubt whatever that I would place my complete confidence in him. But I have to take into account the position as it may apply to some future Comptroller and Auditor-General who may not have the same degree of understanding.
	As a result, we need to be careful about letting accountants look at the working of effectiveness when they cannot even define it properly. I wanted the National Audit Office to be in all sorts of areas, which it was over a long period of time. I never sought to limit inquiries. But there are a few areas where value for money is hardest to apply. I believe that that is one of them.

Lord Lipsey: My Lords, I am sorry that, inadvertently, the letter that my noble friend intended to place in the Library went astray. If the noble Lord, Lord Sheldon, wants a copy I have one.
	The noble Lord, Lord Sheldon, spoke with great passion about the BBC. I agree with all that he said about the wonders of the institution. The BBC has signed up to the agreement. We can take it that the very real concerns that he expressed will have been taken into account by the BBC before signing the agreement. I hope that he will set his mind at further rest by reading the agreement.
	The agreement was sent to me. It is a very good deal. I wish to deal with one point that is not concrete in the agreement. It states that the audit committee of the BBC will lay its report before Parliament "probably" once a year at the time of the annual report. That is not terribly satisfactory. It means that in some cases they will sit around for a long time. The PAC will have difficulty organising its programme, which is organised a year in advance around that. I hope that the Minister and the BBC might look again at the inclusion of "probably". It is not a point of principle but a question of efficient and effective management. I do not think that the proposed approach is the most efficient and effective one.
	I shall pause for a minute for rosettes, as this is a remarkable item of business. With the possible exception of the noble Lord, Lord Sheldon, we have moved from a situation where some people at one extreme said that the NAO must have full power over everything and others said that the proposals were a disgraceful attack on the BBC's editorial independence. It has been a very good process where everyone has come together and signed up. I pay tribute to the flexibility of the chairman and governors of the BBC, who took some persuading but are now persuaded. They have given the absolute assurance that they will do it properly. I pay great tribute to the noble Lord, Lord Sharman, who endorsed the agreement.
	Finally, I give a rosette to someone who might otherwise lack it, not being on the Government Front Bench: the noble Baroness, Lady Buscombe. I know that this has been a difficult issue in her party also. It is terribly important and significant that in Parliament all sides—subject to anything the noble Lord, Lord McNally, might say—have said that they will give the agreement a go and have another look at it during the charter review, hoping that it will not be controversial. They have said that they are prepared not to hang on to principled speeches and will work towards getting a practical agreement to work. A very large rosette goes to the noble Baroness, Lady Buscombe. I am very glad that the issue has been resolved so satisfactorily.

Lord McNally: My Lords, I know that the noble Lord, Lord Lipsey, received the letter. It also went to Shirley Williams, Colin Sharman, Edward Leigh, Gavyn Davies, Sir John Bourn and, for all I know, uncle Tom Cobbleigh. I did not receive it. I got it from the noble Baroness, Lady Buscombe. I shall be extremely succinct.

Lord McIntosh of Haringey: My Lords, I shall set my stopwatch.

Lord McNally: My Lords, when the great divergence to which the noble Lord, Lord Lipsey, refers, became apparent, I thought it was a good idea and one of the great boons of this House to ask someone who knew about such matters to look at it. I asked the noble Lord, Lord Sharman. What became known as the Sharman compromise is embodied in the letter to the noble Baroness, Lady Buscombe. The noble Lord, Lord Lipsey, is right; the noble Baroness has used considerable skill in persuading her colleagues along the corridor that the proposal is sensible.
	My message is very simple. In 2001, at the request of the Government, the noble Lord, Lord Sharman, conducted a review of public accountability of public sector bodies. Unfortunately, the noble Lord has had to attend another engagement, but he asked me to say that he believes that the agreement—which I saw second-hand and that the noble Lord, Lord Sheldon, has yet to see—falls four-square within the recommendations of the report. I share some of the concern expressed by the noble Lord, Lord Sheldon, about leaping straight into full NAO coverage. However, this is a great step forward in transparency and accountability in the BBC. From all that I have heard it will be approached with the constructive spirit for which the noble Baroness, Lady Buscombe, asked, and therefore it is rosettes all round.

Lord McIntosh of Haringey: My Lords, first, I apologise to anybody who failed to receive a letter. I assure the House that the letter was laid in the Library by my department on 20th June. Of course, laying letters in the Library does not mean that people know that they are there. That is not the ideal way of communicating with people, but we do not always know who to communicate with. On reflection, we should have sent copies of the letter to all those who took part in comparable debates in Committee.

Lord Sheldon: My Lords, it is surprising that I gave the Library two hours to find the letter, and they could not find it. However, it is obvious that my interest was observed. I still do not know, and I am going to hear for the first time from my noble friend what this is all about. It is rather late in the day.

Lord McIntosh of Haringey: My Lords, I entirely agree. We shall have to think about how to put together a proper mailing list for announcements of this kind—and whether letters from one person to another are the right way to deal with these matters. This needs some thought.
	There has been much heated debate throughout the passage of the Bill on this issue, both in the Commons and here. But that should not obscure the common ground that exists and has always existed. We all want to ensure BBC accountability to Parliament and to television licence fee payers. We also want to safeguard the BBC's independence, which is central to its role as our principal public service broadcaster.
	However, there are very different views on how this should be achieved. Those who want statutory National Audit Office access argue that it would pose no threat to the BBC's independence, since the Comptroller and Auditor-General is prevented by statute from commenting on the merits of policy objectives; and Amendment No. 111 includes specific provision to that effect. Others, including the BBC, feel that statutory access would inevitably compromise the corporation's position, because the nature of the BBC's operations means that it is difficult, if not impossible, to separate editorial from expenditure decisions. There seemed little prospect of finding any common ground between those opposing views. So I am grateful to the noble Lord, Lord Sharman, for the proposal that he brought forward in Committee to resolve this issue.
	My noble friend Lady Blackstone undertook to consider the Sharman proposal and report back to the House before Report. Following discussions between DCMS officials and—primarily—the BBC and the NAO, the Government are satisfied that the proposal offers a workable basis for strengthening BBC accountability to Parliament and licence fee payers while preserving the corporation's independence. I wrote to the noble Baroness, Lady Buscombe, on 19th June to set out how we envisage the new arrangements operating. Detailed discussions are required before the necessary amendments to the BBC agreement can be drafted, but I shall set out the basic structure.
	A dialogue between the BBC audit committee and the Comptroller and Auditor-General will be the basis for establishing a programme of reviews. On the basis of the dialogue, the audit committee will settle a programme of reviews and allocate individual reviews to organisations including the NAO. The Comptroller and Auditor-General would not seek payment for any reviews undertaken by the NAO. The dialogue will need to identify those studies which would be particularly suitable for the NAO to carry out, taking this into account. Reports by the NAO, or contractors, will be submitted to the BBC audit committee. The factual content of the reports will be agreed with BBC officials before submission, but the NAO or contractor will retain full discretion over the report's conclusions and recommendations. Reports, whether by the NAO or contractors, will be presented in full to Parliament by the BBC governors, together with the corporation's response, in a timely manner but probably at the same time as the publication of the BBC's annual report and accounts. For those who are worried about the phrase,
	"probably at the same time as the publication of the BBC's annual report and accounts",
	the phrase, "in a timely manner", is some consolation.
	Once reports have been presented to Parliament, it is of course a matter for Parliament to decide how they should be considered. The Government do not envisage a role for the DCMS or its accounting officer in the process. Such a role would infringe the independence of the BBC in its day-to-day operations. As I indicated, our discussions with the BBC and the NAO have satisfied us that the Sharman proposal can work effectively on the basis that I have set out. There will be an opportunity to judge the effectiveness of the new arrangements in the forthcoming review of the BBC charter. Indeed, I can confirm for the noble Baroness, Lady Buscombe, although it is not for me to tell the NAO what to do, that if it wishes to review the operation of any agreement and make representations during the charter review, we would listen to it as we would to any representation made by the BBC governors.
	The BBC has a clear incentive to ensure that it is a success. BBC governors are aware that Parliament and the Government will want to have sufficient evidence to judge the effectiveness of the new arrangements by the time the current Royal Charter expires. The Government expect that the first reports prepared under the new arrangements by the NAO or others will be presented to Parliament within the next two years.
	I read that statement out word for word because it has been a hard-fought agreement and I do not want to depart from it in any way. I have been asked questions that are really not for me but for the BBC governors and the NAO. My understanding is that the governors want to make the agreement work and are committed to it, and that the NAO feels the same—although that is not a matter for the Government. On that basis, I am grateful to the noble Baroness, Lady Buscombe, for indicating that she is prepared to withdraw the amendments—

Lord Sheldon: My Lords, can the Minister say something about the nature of the reviews? I am still mystified as to what the reviews will entail. Are they purely financial? What else are they?

Lord McIntosh of Haringey: My Lords, I have set out the basis on which they will be agreed between the BBC and the NAO. It is not for the Government to speculate in advance as to what the NAO would believe it appropriate to seek to review or what the BBC governors would seek to offer as subjects for review, either for the NAO or anyone else. If I were to do that, I would be intervening in an agreement between two public bodies not controlled by the Government in an inappropriate way.

Lord Sheldon: My Lords, what if they disagree and do not come to an agreement? What happens then?

Lord McIntosh of Haringey: My Lords, I have set the matter out as far as I am able. These matters have of course been considered—the possibility of disagreement has been considered. If my noble friend reads what I have said in Hansard, he will see that that is as far as I am able to go.

Baroness Buscombe: My Lords, I thank the Minister for all that he has said. I have great pleasure in saying that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Davies of Oldham: My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.

Cuba

Lord Moynihan: rose to ask Her Majesty's Government how they view the state of the United Kingdom's relations with Cuba.
	My Lords, I am grateful for this timely opportunity to discuss United Kingdom relations with Cuba and I thank noble Lords in advance for their decision to contribute. However, I note with sadness that my noble friend Lady Hooper is regrettably unable to participate owing to an unavoidable prior commitment.
	I should first declare an interest. In December last year I became chair of the Cuba Initiative, which continues to be ably co-chaired in Havana by Ricardo Cabrisas, Minister of State in the Presidency. As noble Lords will be aware, I have the enormous honour of following in the most distinguished footsteps of the late Baroness Young, whose expert knowledge and understanding of Cuba was second to none. She built a firm foundation of friendship, trust and respect at all levels of Cuban society. She was a great ambassador for this country and for constructive engagement and dialogue, the twin pillars which underpin the work the work of the Cuba Initiative.
	I have since visited Cuba on two occasions, in January and May of this year, and I have had the opportunity to meet and exchange views with many people, both those in Cuba's leadership and in civil society. As the only country in the western hemisphere to,
	"swim against the tide of global capitalism",
	as it has been described, there is no doubt that the conundrum of how to deal with Cuba has long exercised the minds of policy-makers across the globe.
	Earlier this year, the dilemma worsened as Cuba faced widespread condemnation and anger for its crackdown on human rights activists, causing a deterioration in the island's relations with both North America and Europe. Whatever Cuba's reasons, the recent wave of arrests of over 70 leading dissidents accused by the authorities of being,
	"mercenaries collaborating with the US government",
	the severity of the prison sentences handed down to many, and the executions of the three ferry hijackers, met with nothing but censure from the outside world and risked setting in motion a merry-go-round of tit-for-tat repercussions and further mutual provocations between Cuba and its mighty neighbour. Although the US response to date has been more muted than many expected, there has been an inevitable escalation of tension between Havana and Washington.
	The low point in US-Cuba relations has been mirrored on this side of the Atlantic and there is now a worrying rift between the European Union and Cuba. On 5th June, the EU presidency issued a statement announcing that it was,
	"deeply concerned about the continuing flagrant violation of human rights"
	in Cuba and that the EU had unanimously decided to limit bilateral high-level governmental visits; to reduce the profile of member states' participation in cultural events; to invite Cuban dissidents to celebrations of EU national days and to proceed to an overall reconsideration of policy and the EU common position.
	The announcement came close on the heels of a decision by the EU that it would postpone indefinitely its evaluation of Cuba's request for admission to the Cotonou Convention, the treaty which governs trade, aid and political relations between Europe and the 73 ACP group of nations. Havana has since responded by withdrawing its request altogether on the grounds that Europe's behaviour is "treacherous" and,
	"replete with hypocrisy and double moral standards",
	according to a statement from the Ministry of Foreign Affairs.
	There are now reports that a number of EU countries are "rethinking" their position regarding aid to Cuba. There seems to be some confusion over the position. Perhaps the Minister can confirm that there are no proposals to cut off EU aid, a step which I would strongly oppose.
	I regret to say that the reaction in the UK has been predictable. It is no surprise that we have been at the forefront of orchestrating the EU's new approach. It is the default tendency of some in government to shadow America's unreasonable lead on Cuba policy and thus to turn this country's back on constructive engagement and dialogue. Recent events have only reinforced this sentiment and, for some in government, their worst prejudices about Cuba have been confirmed.
	Now that the EU has signalled its intention to proceed to a re-evaluation of the EU common position, it seems likely that a toughening of present policy is imminent. Can the Minister comment on these points? The Government have already effectively ceased all ministerial exchanges for the time being, with concomitant implications for the UK-Cuba relationship. To what extent does the Minister believe that the new EU position will further constrain Britain in its dialogue and engagement with Cuba?
	Yet, my Lords, is there an alternative? While the present situation is a serious setback and is extremely unhelpful to efforts to improve relations between Cuba and the UK, I believe that there is. We must ask ourselves what would best achieve our objective of easing the process of peaceful political change in Cuba and securing the normalisation of relations. Is it by reaching out to the Cuban people through enlarged economic and personal exchanges, or is it by trying to force the regime to comply through isolation and coercion?
	On my recent visit to Cuba, as chair of the Cuba Initiative, I led a trade mission to Havana. I did so because I believe in constructive engagement and I believe that expanded trade leads to economic openness and market-based reforms, which are two of the best ways to encourage change and to bolster civil society. The key role of trading links in promoting openness and improvements in human rights has long been accepted and understood. In this respect, we are lagging far behind our European and international counterparts.
	There are significant opportunities for the UK to develop trade with Cuba, especially in the key sectors of energy, tourism, biotechnology, IT and agriculture. The importance of cultural and other exchanges should not be underestimated. In particular, I pay tribute to the important work of Save the Children in Cuba. It is important to realise that not only do the UK and Cuba have much to offer each other by working together but we can make a difference in other regions of the world as well. Given the superb primary healthcare levels in Cuba and the exceptionally strong emphasis on the importance of education, a number of opportunities exist to work alongside Cuban experts on projects in third countries to combat HIV/AIDS and to promote primary healthcare through mother and child immunisation programmes, for example. I hope that the Minister will confirm that those opportunities will not be overlooked or put on hold.
	Engagement and dialogue wherever possible have always been the British approach to achieving our foreign policy goals and to encouraging improved standards, or else we would not have diplomatic missions in a number of countries such as North Korea, Sudan, Iran, Zimbabwe, even China, to name but a few. Tough messages are easier to send and more likely to be heeded within the context of a relationship based on mutual respect and co-operation than one based on exclusion and distrust. Such a relationship is unlikely to achieve any positive results. The US economic sanctions are a case in point. For over four decades the embargo has failed to deliver any of its goals. Nor are the most recent moves by the US administration to internationalise Cuban policy likely to meet with success. At the Organisation of American States annual general assembly two weeks ago the US Secretary of State indicated a desire for a more multilateral approach to Cuba, including the possibility of pursuing joint EU/US action towards Cuba. Will the Minister confirm that there will be no change in EU policy to allow co-operation with the US on Cuba policy while the unilateral American embargo remains in place?
	It is clear that a further plunge into the icy waters of diplomatic isolation will not bring the goal of crafting a stable and prosperous future for the island any closer. Moreover, it would be a grave mistake to formulate policy towards Cuba in isolation of its neighbours. Policy must be developed within the context of Caribbean nations, and their response is critical. For that reason I believe that it is time for a radical new approach to Cuba, one in which our hands are not tied by the inconsistencies of the EU common position, which itself was a compromise to avoid conflict with the unreasonable Helms-Burton Act. Instead Britain should be in the vanguard of encouraging constructive engagement and dialogue with Cuba. Increased co-operation through business activity offers us the opportunity to encourage Cuba to take its relationship with the UK and the EU more seriously, and in that context the Cotonou convention would have offered a positive way forward, linking as it does political and human rights conditionalities with trade and aid advantages on a mutually agreed basis.
	The withdrawal of Cuba's application represents a serious reversal in EU/Cuba relations since March when the positive step of opening a European Commission office in Havana was taken. That should be a cause for concern yet instead there is a sense in many capitals that the present Cuban government are in their twilight years and it is only a matter of biding time.
	Policy makers on both sides of the Atlantic need to rid themselves of the misguided notion that Cuba policy is locked in a holding pattern until Fidel Castro is no more, at which time the Cuban people will rise up as one and embrace American culture and influence. It is naive in the extreme to think that in the post-Castro era Cuba will effectively become the 51st state of the Union, but that is precisely what many in the US administration, and, indeed, on this side of the Atlantic, appear to believe. In fact, the very opposite is likely to happen. Cuban history is marked by a strong and deep-rooted desire for independence and in the post-Castro era resistance to US influence and the drug and money laundering culture, which has sadly infected so many Latin and Caribbean nations, is likely to strengthen. Fidel Castro's demise will be a psychological loss to the Cuban people, most of whom have known no other leader. It is likely that his successor will usher in change, probably through further economic reform, but the early transition will be witness to authority being maintained. Ultimately, however, it will be the Cuban people who will determine the island's future and UK, European and US policy must be formulated in view of that reality.
	This is a critical time for Cuba. A knee-jerk policy of shadowing US policy will threaten to seal up the window of opportunity just at the very time when Cuba is beginning to recognise the need for further economic reform and a stable, long-term political transition to a younger leadership. Four decades on, we must detach ourselves from a failed US policy that owes more to the determinant of domestic politics and the votes of Cuban-American exiles in Florida, many of whom have been impervious to reasonable opinions and have demanded a hard-line approach.
	Even that is changing. The anti-Castro exiles based in Miami no longer represent the sole centre of gravity for reform in Cuba. As the Cuban-American leadership undergoes its own generational change, many in the Cuban-American community have come to realise that Cuba's future will be determined in Cuba, not by Cuban-American exiles and certainly not by Washington policy-makers. There are alternative voices, and whether or not the Bush administration listen, we cannot afford to be deaf to them. It is in all our interests to integrate Cuba into the western hemisphere as a central part of our Caribbean policy. I look forward to hearing a positive vision from the Minister of how that goal might be achieved.

Lord Rea: My Lords, I think it is very appropriate of the noble Lord, Lord Moynihan, to have raised the Question today. I thank him for that, and for his extremely well-informed and well-argued speech. I speak as one who has followed the Cuban socialist experiment with interest over the years. I do not claim to be an expert, particularly as I have only very primitive Spanish, unlike some speakers tonight, particularly one who I am afraid will not be with us after all.
	I have twice visited Cuba. The first time was in 1997 at my own expense, and the second time was in 1998 as a member of the IPU outward delegation to Cuba. Naturally, I have been particularly interested in the unique Cuban health system, which has been able to achieve virtually first-world levels of life expectancy and infant mortality with virtually third-world resources. I am a member of the Cuba Initiative, founded by the late and much lamented Baroness Janet Young—now succeeded ably by the noble Lord, Lord Moynihan, as he has told us—to promote trade and cultural relations between Britain and Cuba. As a result, I have developed very good relations with the Cuban ambassador and his predecessor, and their excellent officials.
	The amazing thing about Cuba is that the political and economic changes resulting from the revolution of 1959 still survive. As all noble Lords are aware, that is not for want of strenuous efforts by the United States to destabilise Fidel Castro's government. It is interesting that, since the Bay of Pigs fiasco more than 40 years ago, overt military force has not been used. That is all the more surprising, perhaps, since the United States has never been reluctant to use its military muscle whenever it wished in many countries well beyond its own back yard.
	There is no doubt that in a war with Cuba the USA would eventually prevail, but the destruction and carnage would be heavy and would be unacceptable to world and most US opinion, being so close to home. The USA would be left facing smouldering guerrilla resistance, probably to a greater degree than it—and we—are facing in Afghanistan and particularly Iraq. However, the hawks in the United States are in the ascendant, and military action is more likely now than at any time for the past 40 years since the Cuban missile crisis. Although Cuba was not originally included in the "Axis of Evil" speech, statements by members of the US Government have indicated that it is and always has been one of the countries due for regime change.
	Towards that end there has recently been a sharpening of destabilising activities. In particular, the head of the US Interests Section in Havana, James Cason, appointed last September, has been openly inviting dissidents to meetings at his residence where discussions have been held encouraging them to be more active. He has given them substantial financial and material support including radios and computers. He has also toured the country visiting the homes of known dissidents. The Cuban Government have reacted, understandably but perhaps too strongly, by arresting, trying and imposing long sentences on 65 of those dissidents. Of course, that has given ammunition to those—and there are many—who would make much of breaches of human rights and constraints on political freedom in Cuba. They include, of course, the more hawkish elements of the US Government. It should be said, however, that the dissidents have been allowed to appeal against their conviction and sentencing, so we have not heard the last of this issue. It should be pointed out that Mr Cason was appointed by Otto Reich, the very Right-wing Cuban American adviser to President Bush on Latin American affairs, who is known to favour a "military solution" to the Cuba problem.
	It is important to note that some of the activities of Mr Cason—for example, supporting and extending the Cuban opposition movement financially and materially—breach his diplomatic status under the 1961 Vienna Convention on Diplomatic Relations. With regard to the sentences imposed on the "oppositionists", it is worth looking at the US legal code, which can result in criminal prosecution and a 10-year prison sentence for anyone who:
	"agrees to operate within the United States subject to the direction or control of a foreign government or official".
	Mr Cason had apparently repeatedly been warned by the Cuban Government of the consequences of his actions before the arrests were made but these activities continued. It looks very much as though he was deliberately provoking the reaction by the Cuban Government that finally took place. The international critical response, even from many friends of Cuba, that then occurred must have given him and his government great satisfaction.
	The serious consequence of this is, of course, that although in itself it could hardly be held to be a casus belli, it is part of the denigration process that may be used in the build-up to a "military solution". The repeated high-jackings of aircraft and ships that eventually drove the Cubans to end their four-year moratorium on capital punishment, again with international protests, were also encouraged by the United States—by not fully implementing the arrangement made with President Clinton that 20,000 Cubans who wished to emigrate to the United States should be granted visas. This increased the temptation to high-jack; and this temptation was increased when the high-jackers were not prosecuted in the USA—in fact, they were treated as heroes. Incidentally, the aircraft and ships were not returned to Cuba, reportedly being held against the value of property in Cuba formerly belonging to Americans or Cuban Americans which had been nationalised many years previously. It has been said in the United States that a mass emigration of Cubans to Florida would be regarded as a hostile act "tantamount to aggression". The cutting down on visas might be held to be encouraging that, and therefore to be a casus belli.
	My position is one of regret that Cuba has made these arrests and has resorted to the death penalty. I would have liked to see a more subtle response. But I also think that there was clear and almost certainly deliberate provocation on the part of the US Government. It would be counter-productive for the British Government to reduce or end any trade or cultural links with Cuba as a result of these recent acts. To respond as the Right-wing Spanish and Italian Governments—and now, unfortunately, the whole EU—have done or plan to do by cutting funding for cultural or trade links would amount to playing into the hands of those in the United States who wish to raise the temperature of the ongoing dispute that they have with Cuba.
	I have some specific questions for my noble friend Lady Crawley. Can she tell us the current position and what the European reaction would be if Cuba were to re-think its application to join the Cotonou agreement—an application that it has temporarily withdrawn? My noble friend will know that all the recipient nations, in Africa, in the Pacific and the rest of the Caribbean, want Cuba to join. Cuba has much to offer as well as to receive. The hold-up in joining the Cotonou agreement was for many years Cuba's poor record on human rights. But there are other countries in the Cotonou agreement with far worse records on human rights. Recently, Zimbabwe and Nigeria had been suspended from Cotonou, but there are many other countries in Africa with abominable human rights records which are in the agreement.
	Until the recent example, Cuba had, in fact, been sparing with the death penalty, compared even with the United States. Is the real reason for not including Cuba in Cotonou that it has an economy that is not open to foreign capital and remains largely outside the world market economy, although that is not altogether by choice?
	The people of Cuba and Britain have much to gain by keeping up and increasing the cultural and economic links that have recently been established partly as a result of the work of Janet Young, and also through the productive discussions between a number of British Ministers in the last five to 10 years, starting with Brian Wilson, when he was Secretary of State at the Department of Trade and Industry. I hope that my noble friend will be able to give us an optimistic, and not a gloomy, response.

Lord Sandberg: My Lords, we owe a debt to the noble Lord, Lord Moynihan, for bringing this subject up. Cuba was much in the news for all the wrong reasons some 40 years ago. It has only just started to be back in the news again, and again for rather sad reasons. It is a country of which we should be taking much more notice.
	I visited Cuba much less recently than the previous two speakers; I was there some 30 years ago. At that time in Hong Kong we were repairing ships for the Cuban merchant navy, and I was invited to go to Cuba. It was a difficult journey in those days. I went from Hong Kong to Los Angeles, then to Mexico and then to Havana. Once I got to Los Angeles and they found out that I was going on to Cuba, I was put in a little cage well away from everyone else, as I appeared to have some virulent disease.
	It has been a sad 40 years of mistrust between Cuba and the United States. When I mentioned 30-odd years ago that I had had this difficult journey, my Cuban friends told me that I should have told them what plane I was going to be on, and they would have arranged to hijack it. That was their preferred way of doing things in those days; it is now much different.
	Even in those days, there was a great deal of hypocrisy. Even though relations between Cuba and the United States had been taken away, a Pan Am plane flew daily from Havana to Miami. If you had mentioned that to Americans, they would have had no idea that such a thing was happening.
	Of course then there were problems with the Bay of Pigs and the missile crisis, and things went from bad to worse. However, one felt, until just recently, that things were looking better. One should look back a bit to see the start of the Castro regime. Was he a Communist, or was he pushed into it? He took over from the most awful, corrupt, Batista regime. He perhaps did not get it right with the United States, and that problem has sadly continued to this day.
	The Cuban economy has always been shaky. Sugar is the main export, which was helped for many years by the Russians, when they were close friends with Cuba. That has now become difficult. Other exports, such as cigars, are one of the biggest export markets in the world. More recently, their medical facilities have rightly attracted people from all over the world. Nevertheless, they still have a shaky economy, and the recent bayonet-shaking by the Americans has not helped, and nor will it do so.
	Americans have a problem in that they have many Cuban refugees in Florida. We know what happened in the last American presidential election, where Florida became a key state. It would be a brave American politician who started to try to improve relationships at the minute, although of course this should be done.
	So where do we go from a British point of view? There are enormous opportunities for us to trade with Cuba, if only for the wrong reason that the Americans are not involved with trade with Cuba—not that doing business with Cuba is easy. Any Communist or neo-Communist nation has bureaucracy up to its chin and it is very difficult to know what to do. Moreover, they do not have very much money.
	I should know this but I must ask the Minister what the position with ECGD is with Cuba. For a long time, we were not allowed to sell them stuff with ECGD backing. I believe that that may still be the problem, which would be a pity. We have opportunities and we should try to do what we can. More visits to Cuba would be useful for people to understand what goes on. It is a beautiful place. Tourism is a wonderful way of getting to know the country.
	The problem that we now face with America—the EU has rather foolishly gone a bit too aggressively against Cuba—is very sad. We must hope to God that the Americans do not use that as an excuse to invade on some pretext of overcoming the last of Communist interests in the Caribbean.

Lord Thomas of Swynnerton: My Lords, I felt an obligation to intervene in this debate because I spent most of the 1960s writing a history of Cuba. It is a long book. I believe that it has the distinction of being the longest single volume on the open shelves in the House of Lords Library. I have never seen it out, although I once met a bishop many years ago who—more, I believe, out of charitable feeling than truth—told me that he had read it. That book is not easy to find in Cuba, and that is not, I believe, entirely because of its length. I believe that that is because it was critical of the harsh policies imposed on Cuba by Dr Castro in the 1960s.
	Even so—although the book is not available—I have recently been to Cuba several times. I must say that the regime of Dr Castro does not seem to me to have much affected the charm of the Cuban people or the beauty of the Cuban cities—above all, Havana. Without question, it is still the most beautiful city of the Caribbean. It is being well recuperated and embellished by an inspired historian of the city, Dr Eusebio Leal, to whom all historians and historical tourists will always be grateful.
	What is Cuba like today? At one level, it certainly seems as if very little has changed. Dr Castro is still in power; he is the dictator of all policies, as he has been for 40 or more years. His brother, Raul Castro, is the Minister of Defence, and has been for 40 or more years. He is still, as he was in 1960, the heir to his brother. What a remarkable indication of endurance on their part. If one thinks of who was in power when Dr Castro came to power in 1959, one realises that all of his contemporaries have disappeared into the shade: President Eisenhower and Kruschev, Mr Macmillan and General de Gaulle, and Mao and Nasser. Castro, however, remains.
	Furthermore, the fact that Dr Castro recently imprisoned so many opponents of the regime (let us not call them "dissidents"; let us call them, honestly, "opponents") and the fact that he executed those who seized a boat in order to escape from the island—something which one would have thought was a normal desire on the part of people living in difficult circumstances—reminds us that not very much has changed in terms of the political management of the country.
	Yet, some things have changed. First and foremost, I believe, Cuba is now in a position in which it has never been in its history: it is on its own. After nearly 400 years of rule by Spain; after 60 years of subservience—cultural, economic and political—to the United States; and 30-odd years of a similar subjection to the Soviet Union, Cuba in the 1990s has been its own master. I am sure that, whatever happens to the regime of Dr Castro, that will seem the most remarkable characteristic of our time.
	Secondly, as was mentioned earlier in the debate, there has been another change. Cuba was for generations—since the early 19th century—known as the great world exporter of sugar. It was not only an exporter; indeed, it was the biggest exporter of sugar for many generations. That brought great wealth in the 19th century and created great fortunes. That has now changed and tourism has taken the place of sugar. That has been largely managed—partly by Spanish entrepreneurs—with style and good taste.
	Thirdly, Cuba is no longer—I am sure that most Cubans must secretly be happy about this—the motor of world revolution, either on its own, making the Andes the sierra maestra of Latin America, or as surrogate forces for the Soviet Union. There have also been some concessions to our world of free enterprise. Perhaps there have not been enough and perhaps most have been made in the context of tourist needs. Nevertheless, it has happened. There are mixed companies which combine foreign investment and foreign coal management with Cuban national investment. That must surely be an important sign of the future.
	Given those changes and interesting possibilities—the surviving attraction of the island—what should British policy be? First, I entirely agreed with the noble Lord, Lord Rea, when he said that we should have nothing to do with the failed United States policy of an economic embargo. To support such an embargo, which has not worked in over 40 years, seems to me to be a very mistaken policy.
	I do not really know, and I do not know whether anyone has speculated, whether the Cuban Government really desire an end to the policy of economic embargo by the United States. Certainly, an end to it would cause a great transformation in Cuba. But I believe that we should argue for its conclusion in the hope that free enterprise in business could have an effect in the long run—perhaps in the short run—by helping the development of a free political society.
	In addition, I am sure that Her Majesty's Government should support an intelligent, open policy of commerce in collaboration with their European partners. They should hope, too, that, in arguing with Cuban officials the benefits of private enterprise, some of the magic which has characterised development in all ex-Communist countries would rub off on Cuba as well.
	I remind noble Lords that Britain has had a long experience of involvement with Cuban national life. At least three noble Lords led an expedition in 1762 to capture Havana from the Spaniards. Many believe that that was a turning-point in Cuban economic history, helping the Cubans to develop a sugar industry on a far more substantial scale than before.
	In the mid-19th century, a British consul, David Turnbull, sided vigorously with the Cuban opposition against Spain, taking the lead in a battle against slavery of a most undiplomatic nature. Over the years I spent writing my book, and since, I have developed a real love of Cuba and Cubans. I hope that Cubans can devise some way in which their originality—which no one doubts—can be combined effectively in future with the content which seems always to have escaped them.

Lord Selsdon: My Lords, it is, as always, a great pleasure for me to follow the noble Lord, Lord Thomas, and it is with great regret that I did not take that book out of the Library.
	Instead I had to rely on a schoolfriend, Andrew Palmer, who helped me with my work at the age of six. I always thought he was one of our best ambassadors to Cuba. He was kind enough to brief me today.
	I would like to remind the noble Lord, Lord Thomas, that last year was the 140th anniversary of the year when Cuba was British. After the Seven Years' War and the treaty, Cuba was British for about three years. Then, we swapped Cuba with Spain—for Florida. Florida was British. It is interesting to reflect, as did the noble Lord, Lord Sandberg, that if Clinton had not sent back that small boy to Cuba, Bush would probably not have got in, and we would not be at war with Iraq.
	In 1898, at the end of the Spanish/American war, Cuba was briefly an independent territory when the United States suddenly decided to intervene. A couple of years later, that led to the granting of the lease on Guantanamo Bay. I am told that this is therefore US territory. Whether it is sovereign US territory, I am not certain. However, a UK parallel might be Hong Kong or Gibraltar. Fidel refused to take rent from the United States for that arrangement.
	I ask the Minister whether the people imprisoned there now are imprisoned on US territory and bound under US law—or does the territory belong to someone else. We have British subjects there; what is the position?
	In this intrigue, and over time, I always tried to predict significant changes in the world—possibly because I was a young upstart. When I was out there and I saw the first cracks appear in the Soviet Union, I thought it might be an idea to look at where its influence was, and came up with Cuba. I had an old friend from my days in the Council of Europe—most of us must have a Socialist Minister as a friend—Lord Walston, an ex-Etonian, who was a Minister of State in the Foreign Office.
	Harry advised me that Cuba was a good place to go and have a look at, but when I asked him to come with me, he told me that he had had a little difficulty with the Foreign Office. When he became a Minister, he thought it right and proper that he should visit all his territories. The Foreign Office cautioned him that it would not be a good idea to go to Cuba; but he wished to, so the Foreign Office contrived the wonderful suggestion that he visit Cuba—informally—on the way to his plantations on St Lucia, where he owned a small chunk of the island. That was what was agreed.
	So we decided to go to Cuba. I thought it would be easy; but the noble Lord, Lord Sandberg, knows that it was not easy. We looked at the possibility of going to Moscow, taking the plane to Cape Verde islands and then flying on to Cuba. Finally, we gained entry via Panama. The next time, I found that if we went to Jamaica, where I was also working, a small Russian 125 plane, which was known to have the best coffee in the world, flew from Kingston to Havana, so I took that.
	When I was seeing Ministers and others, I said, "Surely we could find a quicker way of having direct relations". They said to me, "Why don't you ring a British trading company?". In London, I rang a man I know and he said, "Oh, yes, we could probably arrange that". I have raised the matter previously in this House, but that gives me a feeling of how remarkable and flexible Cuba is and what a lovely sense of humour its people have.
	I took the plane. It was not Pan Am; it was a regular Thursday afternoon plane from Miami to Havana but it was not quick enough. They said, "You know, you can go a bit quicker". This was 20 years or so ago and I said, "I'll come as quick as I can". I received a telephone call and they asked, "Why don't you come immediately?". I am happy to let your Lordships know that I hold the world record for London/Havana/London. I took Concord to Miami; went down to Terminal J; pressed 1234; spoke to Daisy because Maria was pregnant; was given a Cessner 125 with red burgundy stripes on it; said goodbye to Miami; and left Miami airspace.
	We then had to ring Havana. I was given the radio and told to do so. I was told that Havana was open 24 hours a day and gave the name of the plane. We landed and I had to pay an enormous landing fee. We ended up signing a trade agreement there where we financed quite a bit of trade based upon their back cover.
	I took several missions there and came to like the place. At one point we asked what we could do to help because Havana was rather dirty. I still loved Hemingway and I wanted to have a Daiquiri in the Floridita and a Mohita in the Bodegita, which I did. To my horror, I found that my young cousin, who was a Left-wing extremist, was out there working as a Russian technician preaching the downfall of the Conservative government on Prince A La Taina. She is now working perfectly respectably with the ODA.
	Some time after we discovered that the Americans had invaded Grenada, when the ODA was working on the runway out there and we could not understand how and why. It was these pesky Cubans who were going to do everything else. That upset some of my friends in Cadbury Schweppes because Grenada was the only place which grew limes of equal size which were suitable for Rose's Lime Juice. The one thing we did was to paint the town red, as it was called. ICI agreed to come out and set up a small paint plant and we repainted part of Havana.
	During that time I came to love the Cubans. We could discuss how they received 32 cents a pound for sugar when the world price was 5 cents under the barter agreement. That obviously came to an end when the Soviet Union broke up. We could discuss how they obtained the oil from Algeria in order to pay for the troops who were in Angola and how they could sell their cigars when they did not want the Americans to get hold of them and break the trade agreement. We looked at many issues, including nickel which is a strategic material.
	Four points have since come to mind. I believe that Cuba has one of the best health services in the world. It is far, far better than ours. Cuba has a life expectancy per person in excess of that of the United States. That is quite remarkable. Those are the legacies of Fidel. It has a level of literacy which is above ours and it has an integrated racial society which I find fascinating.
	Throughout all that time, we would receive the monologue about the United States and the dangers America was causing in the world. Sometimes I would have the privilege of seeing the position from the USSR. In the Ukraine one day, they said, "We don't think for one moment that the first missiles that went to Cuba went as deck cargo on one of our bulk carriers. We could have fitted them below and you might assume that they went below but that the Americans didn't want to make a fuss about it. And it was perhaps some of our own satellite photographs that blew the whistle because we wanted to have the point made that if there were missiles within 90 miles of our borders, we should have missiles within 90 miles of America's borders". We all know the sabre rattling that went on and the smashing of the boots. It was so tense. I cannot understand why the United States should be so aggressive at this time. I do not see what it has to gain. It is so restrictive that tourism is limited. We know that France, Italy and Spain have a real booming tourist industry there, as does Canada and to some extent the United Kingdom.
	Trade is difficult because sugar prices have failed. Nickel works to some extent. Cuba's natural resources are perhaps its people. The noble Lord, Lord Moynihan, will remember from his sugar days that Jamaica was down to almost 200,000 tonnes of sugar a year; Cuba 8 million.
	I cannot understand where the next step comes. Thinking of some of the relationships in Africa, I should like to suggest that the Minister considers inviting Cuba to join the Commonwealth. It might appeal to their amusement. It is a form of paternalistic, fraternalistic communism. As the noble Lord, Lord Thomas, pointed out, Fidel is the second longest-serving head of state in the world after Her Majesty the Queen. Until recently, Kim Il Sung and King Hussein were the only other two. He is a wise man; he is no fool. I think that he is genuinely respected and loved by his people. If attempts were made, and there were an open election, I believe that he would get in extremely well.
	His number two at the time, Carlos Rafael Rodriguez, once said to me, "Why do you keep talking about the revolution? You must remember that great king in France at the time of the storming of the Bastille who turned to one of his courtiers and said, 'Excellence, is it a revolt?' 'No, Majesty, only a revolution'". They tried to explain to me that revolution is not an absolute event; it is a slow moving event, as quick or as fast as is necessary to meet the needs of the people.
	I learnt, too, an Irish quotation: that man does not manufacture life, his job is to improve it. I believe that to a certain extent the Cubans have tried. They have had their hands tied. There has been the battle with the United States. Were it to be a state one day, I always think of Interstate 95 which runs from Boston down to the end of Florida; and there the ferries would be.
	I hope that the Cubans remain Cubans. I am privileged to have spoken in the debate. I am grateful to the noble Lord, Lord Moynihan. My experience is now somewhat elderly, perhaps almost as elderly as some of my Cuban friends but I wish them well.

Baroness Thomas of Walliswood: My Lords, we thank the noble Lord, Lord Moynihan, for initiating the debate and congratulate him on his new responsibilities, which I am sure he will pursue with his customary energy and efficiency.
	Many of us speaking in the debate have a real affection for Cuba. But it does us no good to romanticise Cuban society under President Castro. In particular, its human rights record has been extremely unattractive for almost the whole of the time Castro has been in power. We should not forget that.
	Nevertheless, Cuba is not an insignificant place. It is larger than Hungary or Portugal. Its population is over 11 million, larger than Belgium, Greece or New Zealand. That does not include the million and a half Cuban exiles. As the noble Lords, Lord Selsdon and Lord Thomas, said, its achievements since the revolution have been considerable, with literacy, infant mortality rates, life expectancy and access to electricity and clean water at a highly developed nation status. An excellent AIDS programme has been very successful within Cuba, which I should have thought offered a good deal of hope to other developing countries.
	The tragedy is that at the time of the Cuban revolution, both Castro and the then US administration made a catastrophic error of mutual incomprehension, leading to the ferocious US trade embargo against Cuba and the dependence of Cuba upon the Soviet Union. Castro himself recognised the gravity of that mistake when, in agreeing to help the Nicaraguan revolutionaries years later, he made it one of his conditions for so doing that they should not break off relations with the United States.
	In the intervening years, the United Kingdom has maintained a policy of constructive engagement towards Cuba while being critical of the trade embargo. Other countries have pursued a similar approach, with the Canadians and Spanish being among the most successfully committed to maintaining good relations, providing tourists and selling goods.
	When I lived there in the early 1980s as the wife of the British Ambassador—this is the day for reminiscences, but mine is quite brief—my husband and I were invited to see one of the longest-lasting fruits of that constructive policy. At the time of the revolution the Cubans had what one might describe as American milk-drinking habits. Due to the embargo, the supply was cut off and for many years the UK and Canada supplied not only milk powder for reconstitution into liquid milk but also the semen for breeding the local Brahmin cows, a new race of hybrid cattle which could produce significant quantities of milk using tropical grass. It would be interesting to know whether that initiative, of so much importance to other tropical countries, has been continued.
	Nevertheless, with the events of the past few months the British policy of constructive engagement must at the very least be a good deal more difficult to maintain. The attempt by Cuban citizens to hijack a ferry to escape to the United States, the summary execution of the ringleaders, and the arrest and subsequent very severe sentencing of 78 dissidents—I am sorry to use a phrase to which objection has already been made—are distressing events in their own right. They have also thrown diplomatic relations with Cuba into disarray. There have been suggestions that the senior UK diplomat in Cuba, Mr Cason, contributed to the crisis by too warmly and too frequently welcoming those dissidents—many of them people of real distinction—into his palatial residence.
	But that may have been only the last straw as far as Castro, always an unpredictable leader, was concerned. After the tragedy of 9/11, Castro immediately denounced its perpetrators and indeed the whole phenomenon of terrorism. But the US administration under President Bush have nevertheless persisted in listing Cuba among the axis of evil countries which they are committed to dealing with. In that way, the administration continue to give added emphasis to the special status of state supporter of terrorism given to Cuba by President Reagan.
	Of course, Castro has, for many years—not entirely without justification given the history of Cuba—justified his less popular actions or his country's greatest deprivation by pointing to the danger of a US invasion. Perhaps with a weakened economy, without the support of a major power and with US diplomats flaunting their support for dissidents, he really felt threatened.
	Recently I was asked by my noble friend Lord Roper to join him in welcoming a group of Cuban churchmen and women. Certainly they felt alarmed enough to ask us whether we felt that the US really would attack Cuba because of what the administration had said about the axis of evil. We did our best to reassure them. The sadness is that at the same time as the Bush administration maintain their extremely rigid anti-Cuban, anti-Castro attitude, other people in the United States do not. On 30th April this year the veteran Cuba watcher, Dr Wayne Smith, head of the Washington-based Center for International Policy's Cuba Project, wrote:
	"Recent events prove once again that our policy of isolating Cuba—economically and diplomatically—strips the United States of our ability to influence events at critical moments; this policy has been a notorious failure for 44 years".
	At that time a Bill was introduced into the House of Representatives to end the banning of travel by Americans to Cuba, so there are people within the United States who do not take the same rigid line as the Bush administration.
	Nevertheless, there now exists within Cuba an extremely unfortunate situation with serious human rights implications. At the same time the whole issue of the flight of over a million Cubans, mostly to the United States, has come to the fore again. Given that most of them live in Florida and have Republican sympathies, that can do nothing to reduce the friction between the American and Cuban presidents.
	In those circumstances, will the Minister tell us how the traditional UK policy of constructive engagement is being pursued? I hope that the Government still maintain their opposition to the US embargo. But what pressure have the Government been able to bring to bear on the Cuban Government with respect to the hard treatment of the dissident prisoners? Do the Government have any fears that the recent relative tolerance of the Cuban Government of religious expression is under threat at this difficult time? Is trade with Cuba being given the full support of Her Majesty's Government?
	My understanding is that the UK now has only a minor programme of direct assistance to Cuba. Will the Minister clarify the progress of existing EU programmes and of their likely extension in the future? Did the recent negotiations within the European Union on CAP reform have any implications for the market for sugar? I must confess to a feeling that with some countries—not just Cuba—depending so much on the production of sugar, it seems wicked to continue to subsidise its production within the EU.
	Cuba is a fascinating and in some ways impressive country. Its fate for nearly 50 years has been bound up in the hands of a charismatic leader and a series of largely antagonistic US Administrations. That situation is not helpful to the Cuban people, nor to the cause of peace in the wider world. I hope that Her Majesty's Government will continue to do their best to assist mutual understanding between the two combatants, even in the present circumstances, and to maintain Anglo-Cuban relations in a way that benefits both us and the Cuban people.

Baroness Rawlings: My Lords, I, too, congratulate my noble friend Lord Moynihan on initiating such a timely debate on Britain's relationship with Cuba. I am delighted that it has attracted the distinguished and knowledgeable noble Lord, Lord Thomas of Swynnerton, to contribute.
	Alas, unlike all the speakers so far, I have never had the pleasure of visiting Cuba. But I have always heard—from my parents, friends, and noble Lords this evening—that it is a most beautiful and interesting country, with charming people. All I can say is that through my many Cuban friends I learned Spanish many years ago.
	We have noted with sadness, as my noble friend Lord Moynihan mentioned, the recent political developments in the country when the Cuban authorities broke a moratorium on the death penalty. We on this side of the House join the Government and the European Union in condemning the deplorable action of the Cuban authorities in carrying out the summary execution of three men who had hijacked a ferry in an attempt to escape the island.
	The situation was compounded by the Cuban authorities handing down prison terms totalling many hundreds of years to 75 political activists. Britain has an international obligation to bring all diplomatic pressure to bear on the Cuban regime in relation to human rights abuses. The Government and the European Union must continue to urge Cuba to release its political prisoners and to press for the immediate improvement of the conditions in which they are being held.
	There is an important role for the international community to play in encouraging both the political and the economic development of Cuba. It is a country with the potential to develop in both spheres. However, it is important that when we discuss the role that Britain and the wider international community can play in encouraging change in Cuba, we must also consider the work going on in Cuba itself. Many groups have campaigned for reform in Cuba over a number of years.
	Most recently, we have seen the Varela project, which has called for a referendum on political reform with free and fair elections. I am sure that all noble Lords on all sides will join me in praising the bravery of the project's founder, Oswaldo Paya, given the treatment of political campaigners I outlined earlier, in submitting the project for consideration. We urge the Government and the European Union to continue to press the Cuban Government for a response to Varela.
	However, reform should not necessarily be pressed too fast, as, although it is desirable, the risk of subsequent criminal involvement, as in other ex-communist countries, could destroy the future security and prosperity of the Cuban people. After all, the natural and human resources available in Cuba present a clear opportunity for it to become one of the more prosperous economies in South America. Unfortunately, as we have heard, the political and economic systems that exist in the country have prevented its accession to the world economic stage.
	We share the view of the British Government, the European Union and the United States that there will be a peaceful transition in Cuba, democratically and economically, to enable the country to reach its full potential. That is best achieved through a combination of dialogue, trade and co-operation—culturally, through aid and research.
	There is huge potential for Britain to build on its bilateral involvement with Cuba. In 2001–02, assistance from DfID totalled just £346,000. A further £1 million was contributed to the European Union's programme of aid for Cuba. That was in line with the contributions made by the rest of the EU, which gave a total of 15 million euros in the same year. Indeed, Cuba remains the only country in the region with which the EU has no formal agreement on economic co-operation.
	However, we support the Government's position that for diplomatic and trade relations with Cuba to develop further there must first be significant progress in respect of human rights. That position is strengthened at European level through the common position of the European Union that full co-operation will not be possible until Cuba commits itself to international human rights standards.
	One potential route for the Cuban authorities is to develop further trade and development links. That would be through the Cotonou agreement, which several noble Lords mentioned. Indeed, only in January this year the Cuban Government made a formal application to assent to the agreement. Unfortunately, while the issues concerning the abuse of human rights in the country remain, it is difficult to see how that application can succeed. That is yet another example of Cuba failing to achieve its economic potential purely because of the political situation in the country.
	I shall now discuss the role that NGOs can play in forging stronger relationships between the two countries. Britain's relationship with Cuba has been furthered to some degree through co-operation on some recent ventures. In the past couple of years, for example, a meningitis vaccine was developed in Cuba in partnership with a British pharmaceutical company. The two countries have recently agreed on a programme of bilateral action in the fight against AIDS in Africa.
	The British Council has also played a role in promoting scientific co-operation between the two countries through the UK-Cuba Science Links programme, designed to promote joint research between groups in the United Kingdom and Cuba. It currently involves eight projects, and a further five have been approved to start this year.
	I pay particular tribute to the work of my noble friend Lord Moynihan, who has taken a significant interest in the country. In December, as we heard, he was appointed chairman of the UK Cuba Initiative, which aims to reinforce non-governmental links, particularly through trade, investment and cultural co-operation. I know that he will do it brilliantly, as with anything to which he turns his hand. The valuable work of the initiative not only helps to improve our relationship with the Cuban Government, but also has the potential to benefit the Cuban people.
	My noble friend is quite right when he argues that the events of the past few months, to which I referred earlier, should encourage more, not less engagement. He was also right when he suggested that operating through trade and constructive dialogue is an important way of assisting the average Cuban.
	The case for reform in Cuba is clear. The role that the British Government have to play in that process is also becoming clearer. With over 100 years of diplomatic relations with Cuba, an expanding trade relationship, co-operation in scientific research and the potential for further direct aid, we are in a relatively sound position to influence change in the country. The prospect of further trade and economic development should offer the Cuban authorities a clear incentive to move towards political democratisation and join the world economy.
	We hope that in the years to come, the opportunities that I have outlined above, along with the continued pressure of the international community, and the valuable work of the NGOs in encouraging further trade and development, will bring about improved relations with Cuba and much needed democratic reform.

Baroness Crawley: My Lords, your Lordships have once again raised an important and topical issue. We have had the benefit of great expertise on this subject from the noble Lord, Lord Moynihan, through to the noble Lord, Lord Thomas of Swynnerton, and his fascinating historical perspective on the subject.
	I pay particular tribute to the input and commitment of the noble Lord, Lord Moynihan, who opened this evening's debate from his standpoint as co-chair of the Cuba Initiative. I am happy to record the Government's appreciation of the excellent work done by his predecessor the late Lady Young. I am glad to see her work is being taken forward by the noble Lord.
	We view the current situation in Cuba with sorrow, rather than anger. The UK has enjoyed unbroken diplomatic links with Cuba since it gained independence in 1902, although it has not always been possible for us to have entirely normal relations with the Communist regime. Our relations with Cuba have been framed since 1996 by the EU common position. This is a clear policy of constructive engagement with Cuba, conditional on human rights improvements. We wish to work in partnership with the Cuban Government and all sectors of Cuban society.
	However, recent events in Cuba illustrate with shocking clarity the repressive side of the one-party system there. With a population of 11 million, it now holds a world record for holding prisoners of conscience. This repression, and the reaction to it by many people in Britain and Europe, has rightly resulted in a cooling of relations. We note, with sadness, the disregard with which the Cuban Government hold the opinion of the international community. Until we see Cuba uphold its commitment to the Universal Declaration on Human Rights, and demonstrate respect for the fundamental rights of its own people, co-operation and dialogue will be problematic.
	I shall put the debate into perspective. Regarding UK engagement with Cuba, the UK has modest but growing interests in Cuba. The noble Lord, Lord Selsdon, is right—the Cuban tourist industry has grown rapidly over the last decade, and 100,000 British tourists visit each year. Alas, both the noble Baroness, Lady Rawlings, and I have not yet been among them. Direct UK trade and investment in Cuba is, as yet, fairly small at £20 million a year. But there are at least 15 joint ventures involving UK companies manufacturing or providing services in Cuba. Despite being situated in the Americans' backyard, Cuba's largest trading partner is the EU. Her Majesty's Government, like the Cuba Initiative, seek to facilitate UK businesses through the complex Cuban bureaucracy to develop our market share. We continue to pursue bilateral programmes in science, medicine and biotechnology—areas in which there is high mutual regard. A major biotech mission went to Glasgow in May, and UK Sport recently signed a memorandum of understanding with Cuba—one of only five world-wide.
	Collaborative operations and joint training projects in law enforcement are viewed positively on both sides. UK drugs liaison officers have also established excellent working relations with the Cubans. The Department for International Development funds development projects through its small grants scheme, and has funded specific public health projects in Cuba. We sponsor five Cuban graduates each year to study in the UK under the Chevening scholarship scheme, and our embassy actively promotes cultural exchanges.
	More broadly, the Foreign and Commonwealth Office is pursuing an initiative to fund Cuban doctors to work on an HIV/AIDS project in the Democratic Republic of Congo. The noble Lord, Lord Moynihan, is right, as are the noble Lord, Lord Rea, and the noble Baroness, Lady Rawlings. Cuba is well advanced in health and in science. We hope to see that model for trilateral co-operation extended.
	We were dismayed to hear Cuban accusations on 6th June that EU embassies, including our own, are solely engaged with the opposition. That is far from the truth, as the examples that I have given show. But Cuba's potential, as thoughtfully advocated by the noble Baroness, Lady Rawlings, will remain unfulfilled and the initiative of the Cuban people stifled until its political and economic systems are reformed. It is our duty to speak out against such restrictions on individual freedoms and state-sponsored human rights violations. Our goal is to see a peaceful transition to a pluralist democracy. Along with our EU partners, we continue to follow a policy of constructive engagement in Cuba.
	So where do we stand now? We have left the Cuban government in no doubt as to the strength of feeling shared by EU partners towards the March crackdown. We also expressed concern at the summary trial and execution of three ferry hijackers, which marked the ending of Cuba's three-year de facto moratorium on the death penalty. Those events in themselves are a slap in the face for those countries that wish to work as Cuba's friends, and they compound a record on human rights that is recognised worldwide as seriously deficient. The EU has co-sponsored a resolution on Cuba at the UN Commission on Human Rights for the past 10 years, voicing international concern at the systematic denial of civil and political rights. It also focuses frustrations felt at Cuba's lack of co-operation with UN human rights mechanisms. Cuba continues to deny access to monitors mandated by the UN Commission on Human Rights. The noble Baroness, Lady Thomas of Walliswood, spoke with her own expertise on Cuba's human rights record.
	The noble Lord, Lord Moynihan, effectively described the measures adopted by the EU partners on 5th June, so I shall not go into that. Bilaterally, the then UK Minister for Energy, Brian Wilson, suspended a visit planned in May to Cuba, and our ambassador in Havana invited opposition figures, alongside Cuban government representatives, to the Queen's birthday party in April. EU partners also agreed unanimously to an extraordinary re-evaluation of the EU common position. Full co-operation will not be possible until the Cuban Government commit themselves to international human rights standards. We wish to demonstrate to the Cuban authorities that, although we remain committed to a policy of constructive engagement, we are not prepared to continue with business as usual. The EU calls for freedom of assembly and expression, free media and economy and freedom for all political parties. We urge an end to arbitrary detention, intimidation and imprisonment on political grounds.
	Cuba's response has been vitriolic and disturbing. President Castro himself appeared on television to denounce the EU. Mass demonstrations were orchestrated outside the embassies of Spain and Italy in Havana. Castro has hurled personal insults at Prime Ministers Aznar and Berlusconi, portraying them as Hitler and Mussolini respectively. The EU as a whole have been labelled "moral dwarves" and "economic conmen". The Cuban Government's retrospective attempts to justify the crackdown have been entirely unconvincing. The arrest and imprisonment of 75 peaceful political opposition people has been explained as a necessary reaction to growing subversive forces funded by external powers. In short, the Cubans are suggesting that librarians, economists and grass-roots community leaders are all paid agents of the CIA working to overthrow Castro's government. I shall not waste the time of noble Lords in discrediting those conspiracy theories.
	Several noble Lords referred to the US-Cuba relationship. In that context, the role of the US in Cuba's political stasis is worthy of mention. The US trade embargo and serious travel restrictions on US visitors are intended to challenge Castro's regime. The embargo prevents US companies from trading in Cuba and further measures extend that remit extra-territorially. I can assure my noble friend Lord Rea and the noble Lord, Lord Thomas of Swynnerton, and others that the UK does not agree with the embargo. Each year we vote against it at the UN General Assembly.
	Castro has long used the embargo as a scapegoat for all Cuba's imperfections. It provides a convenient distraction from domestic ills. We believe that, were the US embargo to be lifted—assuming Cuba's own economic policy permits—and travel restrictions eased, Cuba would open up to increased trade and competition, and political reforms would follow. But the existence of the embargo is not an acceptable reason for curtailing human rights and fundamental freedoms.
	A number of questions were asked. I shall gallop through as many as I can in the time afforded to me, while I shall ensure that responses to those that I miss are sent to noble Lords in writing. The noble Lord, Lord Moynihan, asked about the EU-Cuba rift. I would not describe it in those terms. We are condemning human rights violations and hope to see these rectified so that we can continue to pursue engagement of mutual interest. The crackdown and executions have been condemned not only by the EU and the US, as the noble Lord mentioned, but also by CARICOM, Canada and the Vatican, among others. However, we remain committed to our policy of constructive engagement.
	The noble Lord also asked about aid, as did other noble Lords. He is right to say that the EU has agreed to re-evaluate its position. The Italian, French and German Governments have already announced a review of economic co-operation and the EU member states will discuss this issue. The UK's bilateral assistance to Cuba is minimal at present. We shall look at this, along with our European partners, with an open mind. We shall certainly also bear in mind the potential effects mentioned by the noble Lord on ordinary Cubans. I agree that we would not wish to see the general population of Cuba targeted.
	The noble Lord also asked me about trade. I agree entirely with what the noble Lord had to say on this; that is, that it has a key role to play. If we are lagging behind our EU counterparts, it is not because of any lack of enthusiasm on the part of Her Majesty's Government. I wish the noble Lord every good fortune in his efforts to promote trade with Cuba.
	On US policy, what Cuba has done may encourage an apparent convergence of EU-US policies on Cuba. The truth is that we are all shocked and appalled, but our policies remain distinct. On the embargo, I believe that I have made clear the position of Her Majesty's Government.
	The noble Baroness, Lady Rawlings, and the noble Lord, Lord Moynihan, asked about the Cotonou agreement. The debate within the EU would have focused on the relative merits of aligning Cuba with an agreement that stipulates minimum standards of human rights and the fear that the Cubans would take the benefits of Cotonou membership without implementing any reforms. But Cuba's withdrawal of its application means that this debate has been aborted for the present.
	My noble friend Lord Rea and the noble Baroness, Lady Thomas of Walliswood, asked about the US interests section and certain activities. It is not Her Majesty's Government's place to comment on US/Cuba diplomatic practices, but we should like to see proper diplomatic behaviour in all countries where we have missions. Whereas the Cuban ambassador is free to engage with whomever he chooses in the UK, our embassy in Havana is firmly encouraged not to do so in Cuba.
	My noble friend Lord Rea also asked about the current EU position if Cuba was to think of reapplying to Cotonou. I would say to him that if Cuba was to apply to Cotonou now, I fear that the EU response would be "Tough". We need to see movement from Cuba on human rights first.
	The noble Lord, Lord Sandberg, asked about the ECGD's position as regards Cuba. We have recently signed a new memorandum of understanding on Cuban debt repayments. Continuing regular repayments will revive the appetite for new export credit guarantee projects from Britain.
	The noble Lord, Lord Selsdon, in a very interesting contribution asked about Guantanamo Bay and its status. Guantanamo Bay falls under the remit of our relations with the US rather than under UK policy on Cuba. I do not wish to get into a detailed discussion here but I can assure the noble Lord that we are monitoring the situation closely. We continue to voice our concern about respect for human rights and we have been pushing the US Government to come to a conclusion on the future of the detainees.
	As regards milk powder, perhaps I can write to the noble Baroness, Lady Thomas of Walliswood. I thank all noble Lords who have taken part in the debate.

House adjourned at twelve minutes past nine o'clock.